At first, the above title might seem trivial. Readers might think they are being presented with an obvious truth. I must say, however, that from my years of moving around the community of innovation leaders in various countries, this obvious truth keeps being overlooked. As brilliantly articulated in the seminal work “The innovator’s dilemma”, most established organizations are like machines that have been optimized over time to perform their target operation in the most efficient way possible. They wouldn’t be able to exist otherwise. This optimization involves becoming pr (did anyone say GANTT chart and milestones?) and risk-averse. Innovation is a disruptor to this type of practice by definition as it introduces high levels of uncertainty both in terms of risk and potential reward of innovation endeavors.
You will not find a single executive who will tell you that innovation is an undesirable aspect of business management that is to be avoided. At the same time, the introduction of high-risk high-reward projects into a stable system can potentially cause harm. It can consume an exorbitant amount of resources, consume the time and focus of the most talented managers and in the case of failure which is highly likely, have a negative business impact and even generate a long-lasting negative effect on employees’ morale and careers. It is very easy to advise companies “to be more like Google/Amazon [name your favorite innovative company here]”. It is much harder for companies that weren’t founded with an innovative mindset to transform themselves into ones.
As a result, business leaders tend to fall into one of the following pitfalls:
Marginalization – To marginalize innovation is to tackle it within the confines of our comfort zone. Producing innovation events, offering related training, inviting successful entrepreneurs who will inspire the company to innovate – these are all examples of attempts at lighting the fire of innovation. It is however analogous to throwing matches at wooden logs. It generates a nice effect but the logs won’t catch on fire this way.
Big bets – Leaders who are totally driven to show an impact, have a tendency to also pick a small number of items out of existing opportunities and place a lot of effort behind them with the belief that their sheer force of will and leadership along with massive resources they’ll be willing to dedicate to the endeavor will suffice in taking the company to its next innovative level. The problem here is that essentially, we are talking about a single attempt at a small number of big bets. Innovation is a skill that should be acquired over time. Simply trying once by making a small number of big bets is a sure recipe for failure and frustration. Continuing our wooden log analogy, it is like throwing gasoline at the log. It will leave it scorched but the nurturing hours-long fire we are looking for will not be the result.
Romanticizing – Innovation can also be framed as something achievable only through the most brilliant minds that will invent something new or come up with some ingenious solution to a problem. The symptom for this pitfall is the creation of thinker/tinker teams that innovate in a bunker (or ivory tower) and have very limited ability to impact the mainline business at scale. This is analogous to inviting a team of fire experts to analyze the logs but provide them with no other form of kindling or means of making a spark.
My clear stance on this issue is that the only way for organizations to become innovative is by starting to execute innovative projects in a way that limits overall risk and overall cost. Another key to success is employing practices that involve the mainline business so that it pulls promising projects for execution at scale rather than being pushed to do so. Methodologies such as lean startup offer an excellent foundation for the challenge of running what are essentially entrepreneurial projects using standard tools and practices.
An innovation system such as this will not manifest by itself. It requires the sponsorship of senior management. It requires resources and it requires perseverance. Transforming into an innovative organization through the establishment of such a system doesn’t happen overnight and it involves a lot of failures. However, while projects may fail individually, they do serve as the kindling over which sprigs and small branches can be added in order to light the great innovation fire that organizations seek. The learning that failure provides within a system that recognizes such projects and their failure as part of a process, is what makes the transformation a realistic outcome. When such an innovation system is run in ways that are systematic and can be sustained through the ebbs and flows of the business cycle, organizations can gradually transform themselves and develop an innovative side that can co-exist alongside the established business practices. This is how innovation can be introduced in a gradual yet unrelenting and effective way.
The writer is an innovation executive for one of the world’s largest pure-play software companies and the creator “PEAK Innovation” principles.