In some research I’m presently doing for a project, I came across an academic study that was published last October in the Journal of Marketing (behind a paywall unless you are an academic, I think). The study, conducted variously by researchers in the U.K and North America, looks at what happens when CEO’s spend time thinking about, and leading for, the future. The headline conclusion? CEO’s who spend time thinking about the external factors can influence positive innovation outcomes for their bank even when they aren’t involved in the innovation process itself.
The research used the roll out of Internet banking in 169 North American banks as sample data. The researchers collated a range of public statements made by CEOs of these banks and applied a statistical technique to come to a measure of how forward looking each was. They then correlated that data with three key outcomes: when, firstly, the concept of Internet banking was discovered by the bank, secondly the time an effective response was rolled out to the market, and finally, the breadth of functionality that the rollout offered, compared to other competitors.
You’ll not be surprised to discover that banks with forward looking CEOs were rather better than their peers in recognising that Internet banking might be important. The study uses the time banks registered an appropriate domain name as a proxy for this realisation. It found that, on average, it took six years between the first bank in a market registering an appropriate domain name and the remainder of the pack following. However, the worst banks took up to nine years. There was substantive support for the correlation between a forward looking CEO and better performance at detection of the new trend.
Also unsurprisingly, there is substantive support for the proposition that the actual speed to deployment is increased with banks that had forward looking leadership. For internet banking, the average lag time between the first bank in the market deploying and the rest following was just over four years, but the worst performers took almost 10.
But here is something unexpected. Remember, the study didn’t look only at CEOs that were actively involved in the innovation process –the measure was whether they were forward looking or not. But even when CEOs don’t actively involve themselves, there is a very strong correlation between their leadership and the outcomes generated. For the first banks to deploy internet banking, the mean number of innovations introduced was around thee. But the best performers had just under 5 – a substantive and hugely valuable difference. The evidence supporting the proposition that this can be explained by CEO and leadership thinking is statistically highly significant.
The authors summarise their findings in the following way:
"…to lead innovation activities effectively and efficiently, the key challenge for CEOs is to create, maintain, and exhibit a broad, forward-looking attentional stance"
Here’s the key takeaway I get from all this analysis. Success as an innovator need not be judged only on how many things you’ve rolled out that wouldn’t have happened without you. Stimulating future thinking in the leadership of your bank is perhaps, as powerful a way to success as actually fostering the changes yourself.