Innovation Starts with the CEO

Innovation Starts with the CEO

Innovation Starts with the CEO 700 323 Paul Benevich

Innovation Starts with the CEO 

The CEO has a tough job when it relates to Innovation.   The CEO must balance both near-term and long-term company objectives.

In most companies, the resources are focused on hitting monthly and quarterly goals.  This makes it extremely difficult for the CEO to balance longer-term initiatives such as innovation.

In my experience, many companies have good intentions about being innovative and creating a culture of innovation. But when a company is stretched and sprinting to reach quarterly goals, innovation initiatives can take a back seat, and innovation resources diverted to help achieve shorter-term goals.

For this reason, innovation rarely gets the backing it needs to be successful.

In order for a CEO to have a chance at successfully instilling a culture of innovation and actually introducing new solutions to the marketplace, the CEO must communicate his or her vision of innovation as well as ESTABLISHING certain company RULES as they relate to it.

Below are four ways CEOs can ensure that innovation initiatives have a chance at success:

#1: Communicate that innovative initiatives are STRATEGIC   

The CEO must clearly and consistently communicate the long-term importance of innovation within the company and why this is imperative to the long-term survival of the company.  This is not a one-time vision speech, but a mantra that is communicated often and to all levels of the company.

#2: Insist that innovation resources are off limits to other departments

It has to be communicated and enforced that leadership cannot divert innovation resources (team and budget) to help reach shorter-term goals.   Diverting key innovation resources to help achieve short-term initiatives sends a message that these resources take a back seat to short-term needs and undermines the importance of their strategic importance.

#3: CEO must make the success of innovation personal to company leadership

Company leadership should have a vested interested in seeing innovation initiatives succeed.   Rewarding leadership throughout the company for helping the company in achieving certain innovation milestones can help rally everyone around these initiatives.

#4:  The CEO must set innovation expectations with investors

As a company gets larger, the investors become increasingly focused on short-term goals.   It is critical that the CEO sells the investors on the long-term benefits of innovation.

It has been shown that once a company is considered an innovative company, it gets more leeway with regard to hitting its quarterly goals and can get a significant P/E innovation boost.

Below are some excerpts from the Jeff Bezos 1997 Shareholder letter to investors:

  • We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
  • We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
  • We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.


To have the best chance of creating a culture of innovation, the CEO must to be 100% committed to it and make it clear that innovation initiatives are strategic and off limits to other departments.  It is also helpful to align the company by incentivizing leadership for reaching key innovation milestones and set investor expectations regarding the innovation philosophy that the company is undertaking.

Committing to innovation can be difficult because it is unpredictable and failure is part of the process.   Balancing short- and long-term initiatives will be difficult, but necessary for long-term success.


Paul Benevich has been helping to re-imagine companies through innovation for the past 20 years.  Paul can be contacted through his consulting company or by emailing him at