Innovation: a difficult topic

How well are managers able to judge the value of innovation within their organisations?

Finding the unexpected

I was running a workshop for innovators within a big company. Great and novel ideas were discussed, challenges were solved and exiting business models were created. Yet, in the background everyone feared his or her idea would perish in the day-to-day bureaucracy.

When it comes to innovation, most managers tend to privilege the existing revenue stream over innovation. In their day-to-day reality, innovation is a balancing act between the powerful organisational mainstream and some fragile unproven new streams. And in most cases the organisational mainstream wins.

Yet it doesn’t have to be that way.

Innovation can be organised next to the moneymaking machine that made the success of the organisation in the first place. Here are 9 signs showing you’re taking innovation seriously.

1. You stay open for the potential of seemingly small ideas. You don’t leave innovations on the shelf because they will not result in double-digit growth within, say, 2 years. You don’t put your efforts on the next big thing (that no-one can plan anyways) because you’ll miss the great innovations that will keep you at the top in the long run.

2. From onset you define the affordable loss. In the process of innovation you will get lost and make mistakes. That will cost you money and that’s OK. But you know how much you can afford to lose. You know when to pull the plug. Until then: you experiment!

3. You know innovation is a different game than the operating business. You redesign your metrics as innovation is about learning and experimenting. It makes for different type of questions in terms of strategy, tactics and day-to-day business (read my blog on the topic). If you use the metrics in place, you’re innovation will suffer!

4. You incite every part of the organisation to get part in the innovation process. Innovation happens throughout the whole organisation. We tend to think in terms of product or service development when we think of innovation. But in every corner of the organisation great ideas might appear: logistics, marketing, etc…

5. You do not organise innovation as a separate entity. Think Xerox PARC. According to the legend, Steve Jobs got all the ideas for his Macintosh while visiting PARC that was set-up as a special R&D unit for Xerox. A special R&D unit may come up with the craziest ideas, but you organise a strong connection with the mainstream operations.

6. Innovation means managing cultures. ‘The way we do things here’ within the mainstream does not apply to innovation efforts. People get jealous or unmotivated if another division gets the glamour and the resources. Also, innovation will be viewed sceptically by the mainstream. ‘Will it affect my business?’ ‘are they targeting our clients?’ are all legit questions that you manage.

7. You are promoting collaboration and your innovators know each other within the team. They are familiar with one and other and their respective working style. This tacit understanding helps them get into a flow. Thus they will come up more easily with ideas and ways to push their innovation forward.

8. You are not working in secret. Your innovation teams build coalitions and make sure the ideas will get accepted. They regularly keep key persons in and outside the mainstream updated, thus reinforcing the idea that innovation is part of the normal ‘modus operandi’ of the organisation.

9. You have a clear and open decision tool on what innovation to pursue. It’s a pyramid in which top ideas get the lions’s share of investment and underpin the strategy. Underneath is a portfolio of promising midrange innovations and at the base you find a great variety of small early stage ideas. You let ideas flow up and down the pyramid.

Some resources:

–      Group Genius: The Creative Power of Collaboration by Keith Sawyer

–       Effectual Entrepreneurship by Stuart Reed e.a.

–       Corporate Effectuation: What managers should learn from entrepreneurs by Thomas Blekman

–      The other side of innovation by Govindirajan & Trimble
–      Work on HBR by Rosabeth Moss Kanter