Meme: Innovation is essential for maintaining strategic competitive advantage.
We are told that CEOs and other C-level exec’s worry about this.
Most if not all organisations share the fact that senior leadership sponsors and drives the innovation process.
Without the man/woman in the corner office telling us to innovate, we simply carry on with our day-to-day slog. However, being given the message that Innovation is important is clearly not enough. When the head girl or guy declares that “We have a responsibility to innovate” do we know what this actually means? Do we know what to do next?
Does our company organise global ‘innovation jams’?
Do we ponder if only for a minute or so; “What does this mean for me?”
Does our company look to its own people for innovation or do they draft in troupes of heavyweight consultants?
Perhaps we get volunteered onto some working group or committee charged with innovation? Does that group toil away in meeting rooms for a few months marshaling all it’s collective creativity, only to find that after presenting the conclusive shortlist of innovation candidates to senior management; the ideas simply wither on the vine or get rejected outright?
Despite best efforts, does our organisation stumble when confronted by the symptoms of its particular status quo?
Here are a few observations about what tends to go on around innovation in companies doing little more than pay lip service to it as well as a few simple things we might want to embrace if we are taking innovation seriously.
Innovation is not about idea generation:
Thomas Edison “The wizard of Menlo Park” understood very well that Innovation is largely about persistence.
“Ideation” (Creation of ideas) is only one important process in the innovation pipeline. In addition to setting up the first industrial research lab (Menlo Park 1876) he knew that a myriad of innovative discoveries leads to very few persistent products. He designed an organisation and process around this. He also understood the crucial importance of exploiting pubic opinion, public relations, press coverage and marketing as part of the implementation [of an innovation].
Organisations first need to decide on the strategic importance (value) of innovation. This starts in the boardroom and needs to flow through CEO, senior leadership and the entire organisation. As we will see below, part-time innovation is probably a waste of valuable resources. If the future of your business does not depend on re-invention of business model, product, process, the suggestion here is that you ‘get over it’ and stop pretending that Innovation is important.
Once we know ‘why’ we must turn our attention to the strategic context and high level goals for our investment in innovation. The stakeholders of this effort and investment need to agree broadly on what they are trying to achieve, what ‘progress’ will look like and perhaps some boundaries around the investment they are prepared to set aside for this to be realized (time & money). At board level, some discussion around ROI/ROE for such a strategic investment will be required. It is strongly recommended this is done in the broadest context possible; within the appetite of stakeholders. Rigor of ROI is perhaps inversely proportionate to the extent of creativity we can expect in our innovation process. Cisco’s Cultivated Innovation Model and Producer Model provide us with a great example of how to control this while maintaining discipline.
Having resolutely decided to innovate, steps need to be taken to ‘genere’ – engineer the DNA - of our organisation - in order to embed the Innovation process with all its attendant risks and very occasional rewards.
Another important thought process and decision is around source and resource. Will we depend entirely on internal resources and an entire innovation process that sits behind the firewall? In a world where so much has already been ‘done’ and where innovation chatter across the internet increases exponentially, do we believe that we must look outside of ourselves for inspiration? Perhaps a high-brid model, which includes both is best for our specific objectives. If we are looking for breakthrough ideas arising from a large and diverse set of innovation ‘candidates’ then intersecting disciplines and multiplying the possibilities by deliberately combining internal knowledge with external can be very powerful. – see The Medici Effect
Let the smarts do their own thing:
Have you ever been in a meeting full of worker bees + someone important where the most senior person in the room prefaces a statement with “I might not be the smartest person in the room but….” ?
This should be a dead give-away and let’s face it when Senior-Guy uses that expression, what they are actually saying is that they are the smartest person in the room in their opinion. Obviously this becomes more of an impediment to creativity and does little more than reinforce any barriers that junior staff already perceive in terms of speaking up or taking personal risks.
If leadership genuinely wants to foster innovation they should probably be looking at how they can enable, empower and encourage the people and process while taking visible measures to stay out of the way.
Innovation on top of your day-job:
How is your performance measured? What action is most likely to earn you that extra recognition from the boss and/or bigger slice of the bonus pie?
Companies are – in the main – hierarchical. Most are meritocracies where performance is measured within a set of contextual/functional metrics. Let’s face it; getting the best out of our workforce depends on this approach. Let us acknowledge however, this results in several impediments to creativity and innovation:-
Fear: Fear of judgment, fear of ‘failure’ reinforcing our reluctance to take a risk, fear of becoming a ‘tall poppy’ or ‘spoiling the market’ as they say in Asia. Every employee in every company plays a day-to-day game of balancing “You’re your head down and no one will notice” versus “I need to shine”. Passionate speeches from leadership that aim to encourage the masses to embrace a more ‘open’ culture where creativity and innovation can foster; do little to allay the fundamental fears of most employees.
The second dynamic relates to measurement and reward. For the vast majority of staff, managers and even senior leadership, measurement of performance and judgment of competency are largely based on operational metrics. In the higher ranks of leadership this might take the form of ‘balanced scorecard’ with posh sounding metrics such as earnings, ROE, expense ratio, growth. For the average employee, measures are likely to focus more attention towards productivity, delivery and other very concrete and tangible targets.
Metrics play a very significant role in determining behavior.
Human nature being what it is means that everyone’s behavior inside the body corporate will be governed firstly by the things they are measured on and secondly by the behavior of their boss or bosses.
It is important to acknowledge the existence of these dynamics if we are to take steps to mitigate their impact on innovation.
Those companies that ask employees to engage part time in the creative/innovation process will invariably gain little headway. It is considerably more effective to set up creative teams from within the workforce by deliberately creating an ‘ecosytem’ which provides the objective, motivation, processes and headroom for teams to thrive and become productive specifically in terms of Innovation; as opposed to ‘production’. It is entirely possible that some of the brightest and most creative people are to be found in the existing workforce but if we do not overtly enable them we should not be surprised if the results are disappointing.
By definition an Innovation must be something ‘new’; be that a new thing or a new way of doing something we already do. However, such a ‘thing’ will only be acknowledged as an innovation if it persists in terms of the value that it brings to society, the company, the customer etc. Put simply, there are many great ideas, few of which persist. This introduces a time dimension to the process as well as a degree of uncertainty that most organisations tend to struggle with. If we want to take the business of innovation seriously it is crucial that we acknowledge these realities before we ask our people to go off somewhere and innovate.
Glaxo SmithKline’s CEO Andrew Witty talks about their revamped drug discovery process and how the concept of ‘failure’ needs to be redefined when it comes to motivating innovation teams who will play a pivotal role in drug discovery, being critical to GSKs ongoing success. GSK used to declare a goal of bringing 3 new drugs to market every year. In the real world of innovation a goal like this becomes a case of setting oneself up for failure. Andrew Witty has discarded that model and has replaced this with a metric that specifically encourages experimentation and ‘failure’.
Given the nature of the innovation funnel (See “Finnovation” article), perhaps we should measure folks by the number of final innovation candidates they develop, implement and eventually discard (Fail).
Back to our CEO/CXO. If they serious about innovation they will make a very point of publicly praising the years most exciting ‘failures’
The bottom line is that we need to think very carefully about a set of stimuli and ‘metrics’ for our innovation teams and recognize the difference between these and regular production/operations type performance assessments.
Many organisations create dedicated innovation teams and processes (SmithKline Beecham drug discovery process). Many more companies create innovation teams from within the workforce. One of the most effective methods is create temporary dedicated teams with a predetermined lifespan. Phillips and Whirlpool have both used this to great effect.
1. Scan the organisation for the most talented, youthful, promising, disruptive and diverse people.
2. Take them out of their regular jobs for a specified time period (suggest not less than 6 – 9 months.
3. Provide them with objectives, frameworks, resources and – most importantly access to every corner of your organisation.
4. Give each team member a set of innovation goals for the duration of their secondment.
5. CEO (or cXo) acts as strong sponsor. Identify a small stakeholder committee.
Diversity and intersection across disciplines, cultures and pre-existing boundaries are good for innovation (@medicieffect)
The next article will look more deeply into the Innovation Funnel “Finnovation”.
