Why innovation struggles to make the leap in enterprises
I am a big fan of podcasts. For someone that is on the go most of the time, being able to listen to a podcast is both a good channel for quality content and an easy way to consume content whether I travel by plane, train, or car.
I have shared some of my favorite episodes in past essays. Some like Reply All are both immensely entertaining and offer a good mix of Internet related content and pop culture. Others dive in deep into a subject, like Planet Money or Freakonomics that dig into economics. Still others explore the world of top performers like The Tim Ferris Show.
The common thread is that each podcast makes me think deeply about a topic. The best podcasts force me to think more broadly about how the knowledge shared can pertain to other domains of experience. I am mentally connecting the dots which leads to new ideas and solutions and often to new questions not previously pondered.
Enterprises try to facilitate this “connecting the dots” by creating innovation teams. The purpose of building these teams is to create groundbreaking products and services to remain competitive in the market and leapfrog competitors, both existing, known entities as well as emerging, unknown startups.
History is replete with examples of leading companies that did not innovative and paid the price. Xerox could have been a PC powerhouse, but instead bet on copiers. Kodak invented digital cameras, but the product was stonewalled cause it threatened their film business. Nokia and Blackberry did not see Apple coming. Blockbuster mocked Netflix. Big retailers like Sears & JCPenney got outmaneuvered by Walmart and Target on one end and Amazon on the other.
This has put even more pressure on firms to unlock innovation within and outside of their walls. What ends up happening however is that companies enact “innovation theater”. They wear the costume of innovative things such as hosting hackathons and opening offices that feel like startups, but they never generate actual business results.
Why are enterprises struggling then to create an environment that enables “connecting the dots” and fostering innovation? There are three things across all organizations that leaders need to consider when implementing innovation as a corporate initiative.
· The culture within the organization to make innovation thrive
· The support mechanisms to turn innovation into results
· The talent that has entrepreneurial skills and mindset
Most innovation programs tend to begin life outside the mothership. The thinking is that this innovation group can do things unencumbered by the bureaucracy and slowness of the rest of the organization. This is the wrong starting point. Instead enterprises need to foster an innovation culture that takes hold from inside the core of the organization.
Innovation culture is explained by Jeffrey Phillips in this way:
“It’s a culture that sustains and supports innovation, that encourages reasonable risk and uncertainty in the goal of larger, more profitable products and services.”
The key phrase here is “encourages reasonable risk and uncertainty”. Ideas that are introduced from outside the core of the company immediately get attacked like the body attacks organ transplants. New ideas are perceived as threats instead of opportunities because the immune system of the organization has not been suppressed to accept risk. Innovation that is seeded inside the organization has a greater chance of getting accepted.
Even if the culture has been sufficiently nudged to accept new ideas, there is still a steep climb to face before an idea can become reality. The innovation funnel is where many innovations go to die, all due to a lack of an innovation strategy.
Innovation strategy is the bond between bold vision and the corporate reality of how things get accomplished. Many initiatives are often undertaken all at the same time, and not all will move forward due to resources, people, and funding. This environment favors lower risk investments over bold but risky ideas with uncertain outcomes. This is why most “innovations” are mere variations of the same product, like versions of pasta sauces.
Strategy needs to align the organization to giving innovation initiatives a level playing field with business as usual initiatives. This means budgets, people, resources, and executive sponsorship should have a different path to support higher risk projects. Along those lines, separate evaluation criteria should be established to better assess the learning value of innovation projects rather than simply the binary view of success and failure.
The last aspect is about the talent assembled to drive innovation programs. The type of skills needed in most organizations do not necessarily map to roles that would help spur innovation and execute these ideas to fruition. The innovation team is therefore a hybrid of skills that are both cross-organizational in nature and have a propensity to excel with uncertain outcomes.
Some organizations believe this means hiring outside from top startups. That could be a viable approach, however these newcomers will not have the organizational context to help on the execution side of innovation. Rather, it is best to find “intra-preneurs” that have a blend of technical acumen, business savvy, and appetite for risk to both conjure new ideas and usher ideas to maturity. These people are not unicorns, they exist in companies but never shine because they are not given the agency to be entrepreneurial in their work.
This is why I am so incredibly excited to announce the launch of the Heretechs podcast! It is the brainchild of myself and my co-host Justin Arbuckle, borne out of a coffee meeting one chilly November morning in Toronto. We wanted to highlight the trailblazers in enterprises that are making innovation and transformation happen. We couldn’t be more thrilled with the results. We have six episodes that we have released and you can find all the posts on the Heretechs website or on your favorite podcast players.
How is innovation being led in your organization today from a culture, strategy and talent perspective? And are there any podcasts you listen to that inspires new thinking?
Why are there so many different pasta shapes?
As we are taking about pasta sauces and all…
We help IT leaders in enterprises solve the cultural challenges involved in digital transformation and move towards a community based culture that delivers innovation and customer value faster. Learn more about our work here.