Nathan Furr, professor of strategy at INSEAD, researches what makes great innovative leaders, and he reveals how they develop and spend “innovation capital.” Like social or political capital, it’s a power to motivate employees, win the buy-in of stakeholders, and sell breakthrough products. Furr argues that innovation capital is something everyone can develop and grow by using something he calls “impression amplifiers.” Furr is the coauthor of the book Innovation Capital: How to Compete—and Win—Like the World’s Most Innovative Leaders.
Key episode topics include: leadership, innovation, power and influence, persuasion
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AMANDA KERSEY: Welcome to HBR On Leadership. These episodes are case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock the best in those around you. I’m HBR senior editor and producer Amanda Kersey.
If you’re trying to move a new, unproven idea forward and colleagues are slow to back it, this 2019 IdeaCast conversation offers a useful way to think about the role of influence in innovation. It describes how leaders build credibility and support to turn their ideas into reality, especially when working across teams or without full authority.
Here’s host Curt Nickisch.
CURT NICKISCH: Nikola Tesla and Thomas Edison were great both great inventors of their time. Tesla was brilliant. He even felt sorry for how long it took Edison to come up with his inventions. But Tesla was eventually forced out of his company and he died penniless.
Edison on the other hand racked up commercial success. He managed to motivate employees, woo investors, and win consumers. His inventions broke through to the mass market.
Today’s guest says the main reason that Edison succeeded where Tesla failed was because of Edison’s innovation capital.
That’s the idea that – similar to social capital or political capital — great innovative leaders develop the power to convince people to join their cause and bring unproven products and ideas to reality.
Our guest is Nathan Furr. He’s a strategy professor at INSEAD. Along with his fellow researchers, he studied innovative firms and interviewed their leaders.
He’s the coauthor of the book Innovation Capital: How to Compete—and Win—Like the World’s Most Innovative Leaders.
Nathan, thanks for being here.
NATHAN FURR: Thank you for having me.
CURT NICKISCH: Now, I have to say that with all that’s been written in the business press about innovative leaders like – and the cult of the startup – it seems like one thing that has to be really well understood is how people like Steve Jobs and Elon Musk made their ideas happen. Why did you feel like a book needed to be written about the right stuff that people have to have to be innovative?
NATHAN FURR: Yeah, it’s a good question. I mean, most of the innovation work is how do you get an idea and do something about it. What we don’t talk about is how do you actually win the backing for your ideas in the first place?
And you know, the “aha” for this came to us really pointedly in an interview we were doing with Marc Benioff who is the founder and CEO of Salesforce.com. And you know, we’re sitting in this interview and Marc Benioff is describing his ability to do new things and change the organization. He said, “you know, I’ve spent the last many years – 17 years – building up my ability to change this organization, to do new things.” He said, “it’s like political capital but it’s not. It’s more like you could almost call it ‘innovation capital,’ and it’s something I can use to get things done.”
And you know, it was so, you know, in our faces right then because of anybody in the world who has the credibility and the power to change Salesforce.com, it should be Marc Benioff, founder and CEO, and yet here he still is very consciously thinking about how do I – how do I build up my capital to change this organization, to do new things?
And that, for us, was the big “aha.” We realized, oh my gosh, this thing, innovation capital, we take it for granted but very, very few people, if any, are born with it. Instead it’s something that people – they build up over time; they use it to pursue new ideas, win support, change something; and they can also lose it.
CURT NICKISCH: If somebody like Marc Benioff is spending a good deal of his time and energy figuring out how to cultivate and most wisely spend his innovation capital, is this a bigger problem for people, a CEO or, you know, somebody who is leading a big venture or is it just as hard at the outset of your career when you’re getting started or working your way up in a company?
NATHAN FURR: So I think innovation capital matters for both individuals and organizations. I think it matters a lot for individuals at all levels of organizations. Listen, absolutely as a CEO, you have to – I have to say, you have to be thinking about your innovation capital because I guarantee that your environment will change at some point and you’re going to need the ability to win the resources and support to change that organization. I mean, you know, this was staring me in the face for years.
I mean, the CEO has to think about this, the leaders in an organization have to think about this. I’ve worked with a lot of leaders who don’t, but you’ve got to think about it as an individual too because innovation capital takes time. And so even when we looked inside organizations or we looked at entrepreneurs, it was very critical that they were thinking early about their innovation capital and how they could build it over time so that when they had like a really powerful idea, they could be the ones to advance it. Otherwise, they have to kind of hand it off to somebody who has say more innovation capital than they do to actually get something done.
CURT NICKISCH: Now that you have kind of opened up your thinking to this idea of innovation capital, does it make you look at every story about digital transformation or every company that’s trying to do something new?
NATHAN FURR: Yeah, it does and in a couple different ways. I work with many top executives in well-known companies – some less well known but really pillars of the economy – and one thing I do observe is that they will go announce a digital transformation and we’re going to move into, you know say, exciting space X, Y, and Z and they’ll get punished.
And they get punished because, you know, their investors are saying, stick to your knitting and they’ll be like, well wait a minute, the competitor over there – they’re getting rewarded for doing something new.
And one of my favorite interviews was with Ralph Hamers who is the CEO of ING. ING is a massive global bank. Obviously they have a lot of strength in Europe but they’re global and they’re in many, many countries. And I mean Ralph Hamers has led that bank through multiple transformations – I mean from a kind of mixed insurance company/traditional bank over to being a pure traditional bank and then from that to being a digital bank and then from that to now in the middle of moving to be a platforms company.
That’s a lot of change. Those are big transformations and a big part of how he was able to do that is how he has built up his innovation capital over time and the innovation capital of the organization so that now when he says, we’re going to make this move, we’re going to change this thing, his shareholders are like, all right, let’s try it.
CURT NICKISCH: So you’ve convinced some listeners that innovation capital is this critical component to make things happen in your company and for yourself. How do you start building it? Like how do you develop it? Like how do you just become known as the person who should be leading innovation efforts?
NATHAN FURR: Yeah, it’s a great question and what we really tried to do here was to break down what are the components that go into innovation capital? And what we really came down to is really four elements. It’s said in simple words; who you are, who you know, what you’ve done, and the things you do, the actions you take to get attention for your ideas – what we call impression amplifiers.
CURT NICKISCH: If who you are is a big part of your innovation capital, don’t we already know how to develop that nowadays? This is a time when