What We've Been Observing
While most often approached by our clients to help with their strategy execution challenges, over the past two years, the number of requests to help ”repair” failed innovations began to swell. We saw a distinct trend forming.
Consider three current cases in point:
- The Fortune 500 firm that wants to re-educate its entire leadership culture on the principles and practices of innovation — in spite of being featured prominently in a celebrated business book about firms that “get” innovation
- The technology firm losing innovation capability and confidence internally in spite of having an external award-wining virtual "Innovation University"
- An industrial firm that paid a seven-figure sum to an innovation consultancy for an end-to-end innovation system — complete with sophisticated crowd-sourcing software — only to produce plenty of “cynicism and billable hours for the consultants 1,” but few results, discarding the system 14 months later
What's Going On?
By now, it is generally understood that innovation is a core capability for market-leading firms; a fundamental prerequisite for engaging with and thriving within the current business world.
Consequently, most firms have begun to invest in creating this capability as a result, but with mixed results. The main question that we at BTS try to understand is this: Why do some sophisticated and compelling innovation systems and training initiatives fail to make a difference, and why do others succeed? In the cases outlined above, we encountered varied, firm-specific reasons why their innovation efforts failed. However, we also identified three major innovation missteps that they had in common. Specifically, these firms failed to:
Clearly define the type of innovation leaders expect as a set of actions that have measurable outcomes
Clearly define the role that innovation is expected to play in helping the firm achieve its objectives
Support the innovation effort with their hands and feet
These have less to do with process or tools and everything to do leadership skills. And because the leadership skills in question are often subtle and don’t appear clearly on any competency model, they are hard to spot using company-wide surveys. They have to be observed in action to be seen at all.
What It Looks Like
A first step to getting innovation right is to develop a shared definition of what “innovation” actually means to the firm.
Left undefined, we have found that the word “innovation” often comes to mean many different things within a firm. Common refrains include, "The things R&D and Marketing people do," to "Chasing shiny objectives" and, worst of all, "not my responsibility."
In contrast, our own experience suggests that the most mature definitions for innovation are those that describe the core mindset and actions required to innovate, which generally fall into three categories:
Developing unique insights about what people are trying to accomplish and the problems they are trying to solve, both today and in the future. These actions include such disciplines as "Design-thinking," "Outside-In" thinking, ethnography and the generation of insights (as distinctive from knowledge or data alone). Consider the tremendous success that Lego has had in this area. CEO Jorgen Vig Knudstorp describes his company’s ethnographic approach stating that, "If you want to understand how animals live, you don’t go to the zoo, you go to the jungle." Following this philosophy, the company uses its Global Insights division to explore fundamental questions about why and how children play (also extending their scope to consider people of all ages too), as well as what it is about the core Lego experience that attracts people in the first place. The rich output of insights into the customer’s human experience with their product allowed Lego to expand into new market segments with newer and more sophisticated projects — for example, targeting adult Lego builders with more artistic Lego Architecture sets or developing kits that sync with tablet apps to capture younger builders’ tablet savvy.2
Ideating new and different ways to solve those problems based on the insights generated. This is likely the most commonly understood aspect of innovation; this includes a set of actions and skills in the domain of lateral thinking, "creativity," brain-storming, crowd-sourcing and stimulating idea-flow.
Taking a "disciplined experimentation" to project management by testing ideas quickly and cheaply and capturing learning as you go. Sometimes referred to as "lean start up thinking" or "opportunity engineering", this is an approach to managing innovation projects by running them from checkpoint to checkpoint, rather than envisioning them from start to finish, and evaluating progress and gathering insights at each point, deciding on how to proceed based on these incremental outcomes.
Defined this way, “innovation” shifts from being an amorphous business term — too often thrown around as an empty buzzword — to a set of specific actions that can be learned, practiced, mastered and employed by people in any role, in any function. And — most importantly — innovation can be tangibly tied to specific company objectives.
Consider that definition in relation to another example. The sales leadership team of a Fortune 100 TMT client defined innovation for its global sales force as the ability to solve deal-level challenges in new and unexpected ways, and to think beyond the current technology to work with clients to dream up “big bets” they could take together — all linked to the firm’s overall sales goals. These objectives were defined before any training program and tools were created. The results? Within a month of receiving training in the disciplined approach, a single team reported developing $200M incremental big bets that hadn’t existed beforehand. 3 This initiative would go on to train hundreds of teams around the globe. Elsewhere, a Fortune 100 consumer electronics firm took a similar approach to develop innovation capability for over 300 managers. As a consequence, the client reported a positive correlation between the effort and employee engagement/morale. In addition, members of support functions, including HR, innovated and filed for several patents in the 6 weeks after the workshop, something “which they had not done before.”4
Supporting the Effort With Your Hands and Feet
In all of the innovation success cases we have observed, a crucial key to their success lay in the company’s effort to get agreement from the leadership team on the sort of innovation they expected (and how it was tied to the company’s objectives) before efforts were made to implement innovation processes or train people on their use.
Not surprisingly, almost without exception, we have found this alignment and articulation to be lacking in the firms who have come to us for “repair work.” Creating this alignment up front also serves another purpose — it forces the leadership team to understand and commit to the sort of actions they themselves must take to create an environment in which innovation can thrive, even if they themselves aren’t expected to be trained. We frequently refer to this as “creating your culture with your hands and feet.” In this analogy, the “hands” refers to how leaders allocate resources and reward (or punish) their teams, while “feet” refers to how leaders signal their priorities to others as a function of where they spend their time. The key message of “hands and feet” then is that leaders can say whatever they wish about “innovation”, but they ultimately influence their company’s culture for real innovation as a consequence (often unintentionally) of their own choices, priorities and engagement.
Considering these thoughts, it is safe to conclude that innovation concepts, language, skills and practices are critically important pieces of a leader’s broader skillset. Companies can fail to achieve their innovation goals for a variety of reasons — in many cases due to factors beyond their control — but leaders themselves can stack the deck in their company’s favor by tapping into the mindset and actions necessary for positive change. With an effective innovation mindset in place, the company can better weather setbacks to their innovation strategy, interpret findings and outcomes with a more focused lens and find new opportunities and synergies that less innovative companies would surely miss.
1 Interview with client, 7/2014, discussing the output of their failed innovation intervention.
2 “How Lego Became the Apple of Toy Companies,” Fast Company Magazine, January 2015.
3 Reported by client.
3 Post program survey conducted internally by client; client interview.
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