On leadership

To state it upfront: innovation is an investment. It ties up resources that could be used for other purposes. But rather then expending them here and now, they are put in the bank in hopes of some dividend, some return on investment at a later stage. Innovation ties up money, people, material, facilities, often significant amounts of resources. And it often binds them over long periods of time.

Consequently, innovation entails considerable risk: there is no guarantee that the initial idea will work out as planned, or that it will work at all.  That risk has two facets: one is the opportunity cost of having wasted resources that could have done good for other purposes; the second is that an important problem remains unsolved. Of course these risks must be assessed and compared with the expected return on the investment made: is the value that the innovation is expected to generate higher than the double detriment of not succeeding and losing the resources invested? That’s a tricky decision to make, and that’s when leadership comes in.

At corporate level in the business world, and even more so in governments, i.e. at societal scale, decisions on innovation are characterised by incomplete information and uncertainty. Few solid data points combined with numerous assumptions.  In addition, often it takes months and years between initiating required innovation and harvesting the results, which adds to the overall uncertainty. In this situation, CEOs and politicians, who are responsible for solving major problems, need to be comfortable with a wicked combination of boundary conditions:

• They need innovation to solve the problems they are faced with ;
• They have the power to decide on the appropriate allocation of resources ;
• Their potential success largely depends on innovation that was initiated before they came into their positions, by their predecessors ;
• Their decisions have limited impact on their immediate challenges, but set the conditions for their successors’ successes.

For the faint at heart, this seems like mission impossible. They might feel forced to believe in a system that they do not have an intuitive understanding for, that is complex, even messy, that has multiple time horizons, and that is far beyond their direct control. They might simply hope they could accidentally find a good decision. Not a promising approach.

Leadership is not about belief or hope, it’s about confidence and vision. Especially at the top-level, innovation requires vision that shapes the conditions for future success. That’s easy to say and difficult to achieve, so let’s look for examples. I’d like to offer two, both of them situated in the field of national science policies.

The first goes back to just after the end of the Second World War. In July 1945, Vannevar Bush, then Director of the Office of Scientific Research and Development in Washington, submitted his report on Science, The Endless Frontier to President Roosevelt. In this report, Bush advocated the creation of the National Science Foundation to provide government funding for basic research activities; this included the need to keep budgets sufficiently stable so that ambitious longer-term projects could be planned and executed. He promoted the idea of international exchange of scientific knowledge in order to stay abreast with promising developments and discoveries abroad. And he specifically addressed the need for the nation to improve science education in order to make sure that there is sufficient talent available, in terms of quantity and quality, to execute ambitious science programmes.

The second is rather fresh. In August 2012, Xi Jinping, then Vice President of the People’s Republic of China, gave the opening address at the International Astronomical Union’s General Assembly. In his speech, he highlights the relevance of science and technology as the most revolutionary factor in socio-economic development. He commits to secure stable long-term investments to basic research in fields such as astronomy. He addresses the importance of broad public support for science, and the consequent need to “create a positive atmosphere for the public to respect, love, learn and use science“. In concluding, he points out that extensive international cooperation is essential to push forward innovation, human civilisation, sustainable development, and to benefit of all humankind.

Two instances of vision and leadership. And despite the distance in time, space, and political convictions, the messages show amazing parallels: government funding for basic research, stability and predictability of budgets, international collaboration, and broad science literacy throughout the population. Even though these appear to be almost universal challenges in national science and technology policy making, it takes courage to actually implement the necessary actions against considerable resistance: the need for government involved in any research is often contested; stable or even increasing budgets are difficult to justify and defend in times of economic pressure; international outreach seems counterintuitive to many who consider science and technology achievements as a matter of national pride; and national education curricula have to fulfil many conflicting objectives. Success therefore requires vision, perseverance and an element of hardheadedness.

This is true for leadership in national science policy, and it applies equally to innovation as well. No success without vision and courage. But it would of course be a mighty mistake to focus all innovation on the long-term. On the contrary, it takes a strategy to appropriately cover the short-, medium-, and long-term horizons, implemented through a portfolio management approach. And that needs leadership to be comfortable with the wicked combination of boundary conditions I outlined above. In that sense, leadership must have innovation literacy, i.e. a clear understanding for the reach and limitations of their decisions. This seems worth digging a little deeper …