A new innovation manifesto – because things have to change
Innovation leaders have lost their jobs, and those who are still with their companies have at least temporarily lost much of the passion that is such an important driver for their work.
The reason is that our current model of innovation is broken. And you – the corporate innovation leaders – have failed. I have to plead guilty as well. I consider myself a member of the innovation community although I do not work in the trenches like many of you. But I – and the many other innovation facilitators, consultants and thought leaders – have also failed.
We have failed to convince the top executives who hold the fate of innovation within an organization in their hands that innovation is important. Just look at how executives respond to innovation right now. Everyone who gets innovation scream out loud: This is the time you should really crank up your innovation efforts!
What happens? Budgets are down, projects are being closed and you even see entire innovation units being closed down. Executives are cutting hard – and more and more often too deep and thus throwing precious innovation capabilities out of the window – capabilities that will take years to reconstitute once the recession eases.
So yes – we have failed and we have to ask ourselves some critical questions. One is whether innovation really is as important as we believe it is. The vast majority of companies scale down on innovation during a crisis, and only very few companies aggressively scale up. This happens even though so many voices argue that companies could make significant long-term gains by cranking up for innovation in times like this. Why does it not happen? Are the executives really that far from getting what innovation is about or are we – the innovation community – wrong?
One counter-argument to the above is that times will change. We will have good times again – although in a different way than what we are used to – and most likely we will all forget what happened in these years.
I am sorry, but this argument is just not good enough. We need to find out how to make innovation a sustainable management tool even in – no, make that especially in – bad times. Bad times are inevitable, but we cannot afford having to start all over with our innovation efforts every time we go through such a period. We should not have to go through these roller coaster rides of innovation focus. Innovation as a discipline needs to become less vulnerable to the boom and bust economic cycle.
Of course, we can choose to say that the problem is with the executives. They just do not get it. Let us hope the next generation is better educated and equipped with a mindset that truly understands innovation.
I am pretty sure this will not happen in the next decade or so for the same reason that you as an innovation leader will not join the highest executive ranks within your company. The things you do well just are not deemed that important for the corporations we know today.
If we accept that the situation does not look good, we need to ask ourselves what we can do about it. I see three options:
1. We could decide to just accept this and go with the flow. Things will not change.
2. We could accept that our current methods of raising awareness and implementing innovation are flawed. We fix this.
3. We could radically change our approach on the issue. I have no idea what to do with this option. Still wondering.
I think we need to tackle the situation focusing on option two and include a bit of option three. Here are my thoughts on where to start.
As mentioned earlier, I believe our current innovation model is broken. In the vast majority of companies, innovation is very much a stand-alone discipline based on processes and concepts rather than people and with a very high internal focus and perspective. This has to change. We need a new kind of innovation manifesto and it is our responsibility – the innovation leaders and everyone else in the innovation community – to make this happen. It will not come from the executives or the board of directors. We have to drive this change.
Let’s us take on the challenge and develop a new brand of innovation based on these elements:
• Innovation needs to be highly aligned with the overall corporate strategy to secure the attention and commitment of the executives.
• Innovation needs to focus more on the people making it happen rather than on concepts and processes.
• Innovation needs to be an open process to fully reach the potential of the global resources and talent available.
Besides focusing more on these three issues, we should also stop the hype and over-selling of innovation. Instead, we need to focus very hard on creating results that can be seen on the overall strategy. This does not mean we should stop taking chances. I fully believe in a portfolio strategy with a mix about 70% incremental innovation and 30% radical or breakthrough innovation. That still leaves plenty of room to explore the unknown and taking chances.
If we can make this happen, then innovation leaders over time will become even more important people in their companies, and we will begin to see true innovation leaders in the executive ranks. Once this happens, innovation should be less vulnerable in down economies.
So my question to you is this: How can we improve at convincing the people in charge that innovation really matters? Because if we don’t do this, innovation will continue to be viewed as something that can easily be done without any time the economy falters.
I fully support your assertions. My stressing point is your mention of portfolio strategy & mgmt. I think if resource pruning (people, money) is the norm in a recession, it's also well worth communicating why certain projects need to be cut and others need more attention. This is certain no matter what economic climate we're in – the business case needs to be examined, and for valuable projects: affirmed. Getting other departmental champions onboard also necessary. Politics is sometimes highly necessary in a competing resource-constrained environment, coming from multiple departments.
Because innovation is the result, not the pursuit. You can't pursue innovation any more than you can pursue a rainbow — but you can facilitate the conditions to create one.
That's why integrating the practices of Design Thinking into business culture is so critical. It would be akin to saying, "I have to call…" or "We're scheduling a meeting…". I'm pretty sure Roger Martin would support this view as well, based on his upcoming book "The Design of Business" http://twurl.nl/yzt0pq
I agree with you in most of the mentioned points. Parts of the system have failed and we have to ask ourselves some critical questions. But most of the measures that are suggested in those days remind me of trying to ride a dead horse. It often seems as if "making the old innovation system more efficient" would be the solution.
But what if we have to rethink innovation itself and the goals we are pursuing? What if – after decades of focussing on new products and services – the next innovation would be a social innovation? If we would have to reorganize our thinking, open our company centered minds and rethink the way we live and work together?
I don't know how this could exactly look like but I think this is one of great the challenges of our days and it will be a really radical innovation.
I would argue that lack of education and an innovation budget are the culprits.
A number of the Innovation Managers I have met in client companies are people who have simply been assigned the role by the Chief Executive, usually along the lines of the CEO saying: "I've just been to a great conference on innovation. We need to innovate. Jane, you are now our innovation manager, Come up with a plan!" Jane could be a secretary, an accountant a researcher or just about anything! But, she has little expertise in organisational innovation and probably no budget at this stage.
So, she gets to work on Google, attends a few workshops and hopefully finds some good resources. She puts together a plan and a budget and presents it to the CEO. Faced with an innovation proposal that lacks any real expected RoI information, the CEO delays signing off or decides upon a partial plan to get started.
Jane, then is left with half an innovation plan, little budget and less support from the top than she would like. It's no wonder this example company's innovation plan doesn't go anywhere. Likewise, it is hardly surprising that once the initiative is launched, few employees participate, claiming they have no time for innovation (when they really mean: innovation is not important enough in this firm to find time). I've seen this happen in a number of companies and I expect you have too.
Clearly the CEO needs to be better educated about innovation and her first step is to set up an innovation team and ensure they are likewise educated. Finally, a budget needs to be given to this team.
With education and a budget, an innovation plan is far more likely to succeed. And a budget tells employees that innovation now is important enough to find time!
It's really a matter of survival. Eventually if top leadership doesn't embrace innovation as part of the organizational culture they will be replaced. Look at GM… There is no room to not foster innovation in a flat global economy where new business models are consistently paving the way. These organizations have an innovation heartbeat.
It's a new breed of Leadership that will survive and lead the way—those who embrace a vision of innovation and work across the organization to instill the cultural values. The rest falls into place. Culture is one of the most difficult areas to change…Perhaps this is why we see innovation not taking shape as it should.
One of the challenges is that top managers who lead innovation often are recruited from succesful operational managers. An operational manager often uses 80% of the time on management disciplines and 20% on leadership, whereas the focus of the strategic leader primary must be on leadership (as eg. innovation, motivation). The Danish book "Innovation gennem netværk" has some good examples of the new leadership roles.
Is this such a bad thing? (Ignoring for now the fact that it puts us innovation facilitators out of business.) In my view, the ability to innovate consistently and sustainably has been a distinguishing capability for organizations, i.e. one that serves to create a competitive advantage for those organizations that are willing to take the risks and work hard at it. If however all organizations were to build, maintain and improve these capabilities, then that advantage gained through innovation would require innovative ways of being innovative. Innovation within organizations is therefore a self perpetuating requirement to sustain its original purpose – to create competitive advantage. This cycle of reduced innovation investment will therefore better position those that are willing to invest and take the risks and postpone the need for innovating innovation (or meta-innovation).
Interesting and I agree with much of your position. I wanted to pick up this point above "2. We could accept that our current methods of raising awareness and implementing innovation are flawed. We fix this."
I think there is a lot of scope here to shake things up. In my experience people find it hard to visualise their innovation architecture from end to end and to see it as a continuous process that moves an idea from creation to value realisation. Initiatives often tend to focus only on certain aspects of the innovation process, without looking at the big picture. We need to find a way to help this visualisation process and increase the organisation's agility and provide new freedoms to innovate. In many places it also seems that thinking has become constrained to reflect only the most recent successes – we need more freedom and agility to engage new approaches and tools, even if they have not been proven yet. This means taking a little more risk that perhaps we are comfortable with, especially at the moment.
In terms of improving the way we increase awareness, we should be looking to novel approaches. A possible idea here is to introduce a model which allows you both to envisage the legacy approach and to also explore different (possibly experimental) innovation frameworks in a fun and safe environment – in the form of a business game. I am quite close to finishing a prototype of a game which may add to our capability here- it will be interesting to see if it is helpful in changing people's perception of innovation and their willingness to try new things!
Unfortunately I agree with yoyr manifesto. One of the main reasons which we tend to forget is that most people are creatures of habit. People don't like change, they want to stay in their comfortzones. Theywant other people to change, but not themselves. That is especially true for leaders, they say that they are doing fine, but that their people have to change.
Also people see change as an exception, they long for the return to 'normality'. This is also happeing in the current economicl situation. people are witing until the previous situation of growth will return, the sochs will rise etc. But that will not be the case. The business climate is changing almost in the same way as the climate itself is changed. There is no way back.
It was Darwin who said that the one who will survive is the one most ADAPTABLE to change!
I've sat back and observed this thing called "innovation" from various perspectives. Wearing different hats and viewing how others view innovation.
What my conclusions have found, i am confused. More so now, then i was prior to beginning my quest to identify and discipline myself to adapt a methodology.
the confusion is in the options of understanding innovation. Way to many options by way to many people that perhaps are not qualified to speak about innovation in the first place.
Innovation has been thrown around like its some fad, or some creativity project and so forth.
Innovation is proven methodologies that result in getting jobs done. After much effort, i have come to the conclusion that Strategyn and Innosight are the leaders of the pack on this thing called Innovation.
A blue ocean strategy needs to be implemented by first placing all Innovation leaders who are capable of defining it, and instituting exactly what it is.
then when the options are reduced and we have a system that is proven and methodical. Innovation will flourish.
Hello Stefan,
A very provocative post. The assertion that innovation leaders have failed and that the basic model of innovation is broken is one that has variable truth and relevance as one looks across a variety of organizations. While there are many that fit mold you have defined (and I would agree this is most), there are also those where innovation is thriving and driving growth in corporate value.
However, as we agree that most organizations are failing at establishing innovation as a competence in what I like to call the "accidental innovation" stage of the innovation maturity model, let's consider the substance of your prescription. Particularally, the first two key tenets of innovation that you advocate are in need of some comment.
You put forth, "Innovation needs to be highly aligned with the overall corporate strategy to secure the attention and commitment of the executives."
The core principle here, that the innovation agenda and the specific initiative driven from it must be aligned with the business strategy, is quite correct. It is folly to not recognize this and integrate business and innovation planning.
However, there is a subtle nuance implied by your phrasing. As stated, you suggest that innovation will precede executive buy-in. This is a serious flaw in your paradigm. The reality is that without up-front executive support, innovation won't get off the ground. The executive team controls all funding and resource allocation-essential blood without which the body innovation will simply be stillborn. It is the primacy of management leadership in the innovation culture that led me to list it first in my article on the Five Pillars of Sustainable Innovation Culture (http://www.innovatingtowin.com/innovating_to_win/2008/05/five-pillars-of.html).
You next mention that, "Innovation needs to focus more on the people making it happen rather than on concepts and processes."
The development of the human capital of innovation is certain a key component of building a sustainable innovation environment. But, one should not confuse the structuring of the innovation culture with the innovation that culture is going to drive.
The focus of all innovation must be value creation. That value creation comes from understanding who is the target audience for the innovation initiative and what is the true need and problem set that the innovation is providing a solution for. (Followers of Christensen will refer to this as understanding the job.) The value of the solution is what gives value to the innovation, and when it is aligned with the business plan as mentioned above, this is when you find innovation success.
Thanks for raising a great topic. Hope you find these comments useful.
A lot has already been said here (and I'll add to the choir with kudos for a great article).
I think there are a number of fundamental truths that innovation practitioners and many companies that claim innovation is part of their success, are starting to face. One in particular is all to clear as I look across the landscape of Fortune 100 innovation:
Change and Hope are incompatible.
Seeing a future of higher value and developing innovative means to make it a reality won't get very far if a critical success factor is hoping that the corner office will get it, fund it, or bless it. Further, when the corner office says no, many of us give up, as if we believe nothing of the practices we preach.
When change needs to happen, hope has no role. Actions are key. I'm seeing one of my clients literally transform themselves by the hundreds into a knowledge-enabled innovation juggernaut that is focused on the being the change they need to be, which means (among other things) questioning themselves at every turn, and not being passive and hoping for someone else to innovate for them.
This often means risking your own capital, your job, and the belief that you're passionate about what value you want to bring to the world. As Admiral Grace Hopper once told me as she gave me one of her famous nanoseconds, "If it's a good idea, go ahead and do it. It's much easier to apologize than it is to get permission."
The one comment you made that I would question a bit is to drive innovation as an open platform. I think this dooms innovation from the start. Certainly offering transparency to innovation processes is key to a "learn by doing" model of adoption. An open policy implies that "everyone must be on board". I can guarantee you that if you wait for every possible passenger to join you on your innovation journey, your train will never leave the station.
Thanks again for a great article.
Stefan, thank you for yet another thought-provoking article. There's so much I could say on this topic, but I'm taking a quick break from The Critical Incident and need to keep it brief.
Wolfgang asks: "But what if we have to rethink innovation itself and the goals we are pursuing?" This is a great question and I'm in the process of creating Innovation Next as a repository of information about next practice in the fields of business and social innovation.
In his comment, Simon Evans writes: "In my experience people find it hard to visualise their innovation architecture from end to end and to see it as a continuous process that moves an idea from creation to value realisation. Initiatives often tend to focus only on certain aspects of the innovation process, without looking at the big picture. We need to find a way to help this visualisation process and increase the organisation’s agility and provide new freedoms to innovate."
I agree wholeheartedly, and this is another issue that Innovation Next will try to address. Here's my latest attempt. As you'll see, I believe that an organisation's activities should stem from its purpose, the reason for its existence. The way I see things, Wolfgang's "goals we are pursuing" need to be goals that further the organisation's purpose – the Purpose > Action philosophy.
One final point before I head back to The Critical Incident. James Todhunter comments: "The executive team controls all funding." Not at Shell, where the highly accessible and responsive GameChanger team holds the purse strings of the GameChanger internal venture capital fund. How many of the companies that emulated GameChanger incorporated this vital piece of infrastructure?
I'm looking forward to reading further comments on the important issue you've raised here.
Jack
I saw some comments on LinkedIn about this issue and I found triggers that shows that some innovation leaders still fail. The 3 main conservative blocks to innovation:
1. Innovative people are not commercial so they need help.
2. Innovators need to pay their bills.
3. Leaders have no money or knowledge to accept innovation or sometimes companies need to make money.
So I choose your third option Stefan; radically change to the subject.
A company needs to make money and time nor knowledge is available for innovation? So the CEO's think that innovation is luxury or hobby or not important for money? So people think that innovation-leaders will occasionally be a member of CEO's, Board of Directors and that technical, scientific or economic educated people are the only and most important people that can direct a company or at least a multinational? In what age do we live?
Are there still members of a innovation network who think that innovation as business, happens after we payed our bills with normal work? Each innovator can become a millionair or make his money, sell their quality and knowledge to company they work for or from wich company they are CEO or Boardmember.
How the … can you say that innovative qualities or creativity are fundamental ennemies and cannot live in one person.
A RADICAL CHANGE TO THOSE PEOPLE WHO CALL THEMSELVES INNOVATORS.
Innovation is necessary at each management level, in each economic period or in each financial situation.
Innovators and creators use money, administration, company-structure, people management in a different way and that is as usefull as the normal or scientific approach to these company facets. I am owner and director of a multinational and the organization of our bussinessmodel is totally new for most people. As well as our marketing strategies, people management and financing.
I wear a suit, but also white shoes. I drive a boring company SUV, but my speakers make me dance on the highway and that's the way I enter the offices in my network.
Innovation is equaly important as production, financing, marketing, publication, promotion. CEO's or Board Members who are " they", are not the blocks, but the innovators who make them "they", are the blocks that break the current innovation model. They are so hardheaded that any model will break. Either we remove the blocks or the models? Your option 1 and 2 Stefan.
Innovation is no model but reality and those people who model innovation to something different as the serious, money-earning, decisionmakers are no innovators. So lets remove them both.
Innovators are worldleaders, millionairs, CEO's. Using talents that are not yours to pay the bills, is a great waste of energy. There is no excuse never, except in a democratic decision to focus that specific moment on something else, to consider innovation as less important than other business-facets.
It's your own fault if you consider innovation broken. I do not plead myself or anybody else guilty.
If economy fails and CEO's think they don't need innovation, than they cause this failure.
If innovators think CEO's fail and they cannot do anything about it, than these innovators cause the failure.
All these reasons are no blocks for innovators, because blocks are no problem.
That's the problem why innovative people accept they work only to help the leaders.
This is the reason that innovative people do other work; they can survive to accept other work.
This is why innovators sometimes make big failures, they see no blocks.
The reason for business is "a problem"; that's the market, the source of consumption, the commercial fundament ( I need something and I am blocked to get it, so I pay you to do this and the block is no problem anymore).
Accepting a block, is what we need to learn and to know that what is not a problem for us, is the business for other people. These paradoxs need eachother or there is no business.
A good innovator who knows this can become a worldleader and a economic board member who knows this can also become a worldleader. The first needs to recognize, accept, and threat the block as one of commercial triggers, the second needs to recognize, accept and threat the innovation as one of the commercial triggers.
A great topic and a great conversation. I think that you, Stefan, were commenting on the fate of innovation in big corporations rather than in innovation driven organisations like the one Thom de Bruijn is referring to. My view after leading the EMEA open innovation group at P&G in the last years: Both – innovators and CEOs have to learn how to symbiotically work together in a fast changing, commercially challening environment.
Innovators have to accept that innovation needs to make money now AND in the future – so they need to be less in love with novelty or breakthrough per se and more focussed on incremental and cost innovation. The 30:70 mix Stefan is proposing looks right to me in general. This should win them the support of the CEO – which they need to succeed.
CEOs need to embrace that innovation is the life blood of any successful company and critical for its survival. Size and efficiency alone does no longer guarantee this. Only the ones will survive who best adapt to change. Innovation is the essential part of this change process. So CEOs need to continue to invest into innovation even in economically difficult times. CEOs ignoring this dynamics will lead their companies into obliteration.