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Top Down Innovation

CEOs have another—and an increasingly urgent—assignment to add to their leadership portfolio: driving innovation and tearing down barriers that may prevent it.

To make this happen, they may have to tell shareholders to look beyond the next quarter's results, and they'll have to broaden their own thinking. But if they don't lead the way at their own business, competitors will gain ground.

A recent survey of 765 CEOs conducted by IBM's Business Consulting Services group found that two-thirds of the respondents expect their organizations to be inundated with change over the next two years. Most see themselves as the necessary catalyst to make it all go smoothly.

Their job won't be easy. Despite decades of emphasis on innovation at many companies, "what has yet to be demonstrated is a broad leadership commitment," says Thomas Koulopoulos, CEO and founder of Delphi Group. "It's a risky exercise that requires experimentation, trial and error, and investments that don't guarantee immediate payback."

And it's a tough climate for thinking out of the box, Koulopoulos adds. "The way the markets are assessing the value of companies is still a quarter-to-quarter focus on operational excellence," he says. "As a result, a lot of companies are spending precious resources on operational excellence in areas that are commodity and noncore."

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