Innovation is fraught with uncertainty. Is the timing right? Will the consumer buy the product, and then buy it again? Will the technology work at the right price? The sad fact is that one can do everything right and still get it wrong—and this reality must be reflected in the review process.

Most companies have operating reviews to check performance against well-defined metrics—sales and revenue targets, margin, market share, cash flow—and decide what action to take. In many cases, the tone is one of control, often with an undercurrent of threat.

Nurturing innovation so that it creates consistent organic growth requires a different spirit. At Procter & Gamble, innovation reviews are a search for options, a dig into assumptions, a hunt for clarity. And yet there is also discipline in coming to a decision—how many resources to dedicate to a project, when to cut a project down, when to do nothing at all.

THE LEADER AS INNOVATION COACH

Innovation reviews involve a higher degree of uncertainty than reviews of operating plans or budget forecasts, and require a very different mindset. The leader’s role is to open the minds of the team members through artful questions, suggest avenues to explore and people to talk to, set milestones and ensure they are met. The leader becomes a coach, encouraging certain behaviors, broadening team members’ perspectives and boosting morale.

The leader should do three things:

1. Be honest. The leader needs to provide the product team with a candid assessment of their work. Are some of its projections overly optimistic? Has the team underestimated the competition? Does the team have the resources it needs? Should work on the project be stopped—or accelerated?

The leader and team shouldn’t try to solve problems during the review, but rather come to agreement on required action.

2. Be helpful. The leader should seek to make big ideas bigger. Asking “Have you considered this approach?” or commenting that “This reminds me of a similar experience in business X or industry Y” opens up team members’ minds to consider new possibilities.

The leader should also help the team identify and address killer issues. This may involve directing the team to connect with another group who overcame similar challenges, or helping the team get access to resources.

3. Foster a free-flowing conversation. The innovation review is not a grilling but a dialogue; the idea is to explore, explain and move ideas forward. It should inspire team members and increase their appetites for taking risks.

At General Electric, for example, Jeff Immelt makes it clear to the presenters that he doesn’t want a pitch, but good visuals that show how the team is molding the idea. He wants an actual prototype, if not physically during the review, then virtually on the computer screen.

He then probes and pushes the boundaries using the broad perspective he has developed from GE’s operations around the world and from meeting with customers in diverse industries.

It is the leader’s job to say yes, no or keep exploring.

P&G’S LOW-TECH, HIGH-IMPACT APPROACH

At Procter & Gamble, innovation reviews take place at several levels: for the entire business unit, for a brand or product line, or for a specific innovation project.

Who attends depends on the scope of the review. At P&G’s business-unit innovation reviews, the CEO, chief technology officer, chief financial officer and chief supply-chain officer attend. In addition, key leaders from the business unit and multifunctional members of the innovation team are present.

Each team creates a poster that simply lays out the key idea and technology for the innovation, relevant consumer research data, the business potential, key timing and milestones, and the major issues the team is facing.

Why posters? Because these reviews are often full of scientists, and the posters force the scientists to speak in terms that senior management can understand. If executives can understand it, so can the business units and, eventually, consumers.

The posters are placed on stands around the room. The group gathers around each poster; one or two people from each team go through the data and add remarks. Often, the discussion also involves show-and-tell—where people get to touch and use a product or key technology element.

The leader then begins a dialogue with the team to help assess the innovation plans and identify where the most value can be added. The poster conversations are used as coaching moments, to let people know what the priorities are and how senior management thinks.

And just by walking around the room and taking it all in, the senior management team can make connections that go beyond the specific projects, seeing something in technology A that might be applicable to business B or a process that works in one place that should be replicated globally.

It is an open-ended process, but one with a sense of direction.

***Adapted with permission from The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation (Crown Business). A.G. Lafley is chairman and CEO of Procter & Gamble. Ram Charan is a consultant who works with companies around the world and a coauthor of Execution: The Discipline of Getting Things Done.

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