There’s strong agreement that innovation will drive success in modern business, yet a growing concern that companies are not taking the steps to innovate. The business press asserts that innovation is hard to measure, expensive and often compromised for short-term gains. CEOs don’t understand innovation, we’re told - they do little more than talk about new ideas. I feel compelled to set the record straight, based on my research and personal business experience.

Fear not, America’s businesses will not sink into oblivion and stagnation, at least not in the next few years. The urgent call for action ignores what’s actually happening throughout the private sector. Now more than ever, innovation is important… and there are leaders who are getting it right. Further, many of these executives are baby boomers, the very generation that missed learning about innovation in business school.

These leaders spot the primary drivers of change in the marketplace and the environment – the catalysts to build new businesses and to inspire drastically new thinking that will protect and grow existing businesses. Many of them are game-changers who bring a different focus to the table in enterprises of all kinds and sizes.

In my latest round of interviews with top leaders, I spoke with executives who dared to do business differently and often question dominant industry views. They create distinctive companies by focusing on leading change instead of following the prevailing best practices. They strongly believe that leadership needs to be different today because technology, the consumer, and the global economic environment have radically changed. 

So what does innovation mean in a business context? Consider Peter Drucker’s definition: [Innovation is] “change that creates a new dimension of performance” – in other words, innovation goes beyond scientific inventions or risky breakthroughs. 

As we move beyond the bench-top, innovation takes many forms: a new process or distribution channel, a partnership or alliance, a new business or leadership model, another use or feature for an existing product. Within this definition, there is much that private sector leaders can do to innovate for the short and long-term.

Innovation leaders prepare their people for the future and transform the experience of employees and customers. Take Cisco Systems, for example. As the plumbers of the technology world, Cisco develops the routers, network technologies, and switches that move data at record speeds around the world. Early on Cisco recognized the demand for inexpensive, user-friendly video, an exploding market expected to reach $50 billion by 2013.

According to Fast Company’s January 2009 issue, CEO John Chambers introduced a radical new model that empowered a network of councils and boards to launch new businesses. Indeed an innovation in organization and network design, the change was intended to get products to market faster, heighten employee accountability, and drive collaboration across previously competitive business units. It was a prototype model of global businesses where leadership emerges organically, “unfettered by a central command.” Cisco was transforming the workplace for businesses that would be using social-networking tools, virtual tools, and blogs like never before.

Many of these innovative leaders cultivate relationships outside of their businesses to identify, learn about and plant the seeds of innovation and opportunity. An existing idea in one industry can become a breakthrough in another. In our study, they talked about the power of the outsider, having seen that the most innovative ideas come from outside the company. 

At DuPont, Craig Binetti, President of Nutrition and Health, enjoys spotting new opportunities, thinking differently, and shaking things up. Binetti said that outsiders lend a different view and have no personal stakes in protecting the status quo.

While numerous companies were slow to embrace digital technology, others opted to ride the wave of invention. In fact, the digital revolution has intensified the relationship between the sports leagues and their fans. The leagues have become powerful media entertainment companies that deliver live events, programming and commentary - on video, talk radio, TV, web, digital devices, blogs 24/7. Gary Bettman, Commissioner of the National Hockey League put it this way:  “We’re in the content creation business. We need to make the game compelling and exciting.” The NHL’s infrastructure is based on media and sophisticated CRM systems.

There is no prescribed formula for successful innovation. These leaders possess an openness to change, an unrelenting conviction to pursue business growth, a distain for the status quo, and the will to find what’s new and different.

Many young leaders are taught in business school that when innovating, failure is okay. I don’t believe that leaders and their organizations should view failure as an acceptable outcome. The brilliance of innovative leadership is to get to the right solution, a workable solution, to create results that will make a company or business successful in the long-term, regardless of the difficulties. That’s a pretty high hurdle. Surely it’s the challenge that makes business exciting. In my view the ultimate goal is to feel the adrenaline rush when someone says, “Dare. Be Different. Be In-Demand” and know that’s what you are doing.