Innovation Does Not Happen In The C-Suite

Innovation Does Not Happen In The C-Suite

Read on for our “Tip for Investors”

CEOs and CFOs can help spur innovation by creating a culture that values innovation. One such example is tying a portion of variable compensation to new product development (thinking of Tech companies). However, it is the Business Unit leaders and Product Managers (“PMs”), in particular that are responsible for innovating. Think of PMs as CEOs of their respective product portfolios. The PM more than anyone in the organization ought to understand the customer value proposition and how that value proposition may evolve in the near future.

Therefore, the next time you as an investor find yourself in a meeting with a public company CEO, rather than ask that CEO about what new products are on the horizon, ask what processes are in place to drive innovation. For example:

  • How are employees incentivized to drive new product growth?
  • How much attention is given to new product development in op reviews?

Answers to questions of this nature are far more informative.