by Peter Mulford, EVP and Head of Innovation at BTS
Re-inventing your firm takes more than systems, shark tanks, and consultants on roller skates. It takes building leaders that “get it,” and that isn’t easy. Here’s what you can do:
The penthouse washroom was an odd place for a Chief Financial Officer to have an epiphany. We were on coffee break during an intense two day innovation off-site for the CEO and his directs at a Chinese multinational firm. The purpose of the meeting was to define the company-wide innovation strategy for the next two years. The CFO had spent much of the first day-and-a-half observing the proceedings mutely, arms folded, a scowl of disapproval on his face. Now, as we dried our hands, he regarded me in the washroom mirror and stated, to my surprise:
“You know, I’m too old to use any of these innovation techniques. But you’ve made me realize how the way I do things may block our younger people from using them. So I guess the thing we need to change around here is our minds, not just our tools.”
This location was odd, but the moment was magic. And timely, for it struck at the core of a problem bedeviling firms around the world attempting to innovate: how to create leaders who can lead innovation efforts, regardless of the tools or systems employed.
Most innovation initiatives are bound to fail for predictable reasons.
Now that firms around the world recognize just how critical innovation capability is to their future success, the race is on to build it. The frenzy has given birth to a dizzying array of systems, tools, and approaches. One needn't look far to see it. It is now fashionable everywhere to hold “Innovation Jams,” “Hack-a-thons,” and “Shark Tanks;” to send executives to pricey design thinking retreats; to use software to stimulate company-wide crowd-sourcing and stage-gating of ideas.
These approaches aren’t without merit. The rub is that for many firms, they don't work. Take three recent experiences: One multinational firm invested over $1.2M with a consultancy to install a “proven” innovation system; within a year, “The experience was perceived as a failure and the initiative was subsequently dismantled.” Another firm spent more than that amount with a team of celebrated innovation gurus to install a “disruptive innovation approach;” the effort failed to produce any results and did not survive the departure of their chief executive less than two years later. A third firm launched an award-winning "innovation university" and opened its doors to external partners and customers, only to seek outside help when the university failed to cause any meaningful change for their own managers, internally.
What's going on? This is a question that we are frequently asked when we are invited in to re-imagine or repair a stalled innovation effort. In consequence, it is a question that has captured our imagination for several years. What we have learned (so far) is that innovation initiatives typically fail, regardless of the tools and techniques involved, for a predictable and avoidable reason: a lack of the innovation leadership skills required to make them work. More specifically, they fail because leaders lack the ability to recognize the pivotal moments that matter to innovation at their firm (versus just any firm), and to take the right action in those moments. As a result, they accidentally diminish – rather than advance – the very culture that their tools and investments are meant to create.
The issue is leadership, and it’s a messy affair.
The roots of the innovation leadership challenges are easy to spot. For many leaders, corporate life involves learning and re-learning a set of leadership competencies and models intended to help them drive repeatability and predictability in the business – striking a stable balance between quarterly results and long-term investments; producing engaged employees and satisfied customers; leveraging company assets, etc. For many, this focus goes all the way back to business and engineering school. To advance your career largely meant mastering these skills and applying them to your daily work, and for several decades, this was the business norm.
Fast forward to today. Suddenly "innovation" is added to the long list of competencies leaders are expected to master. The Horror! In contrast to the clean, precise management science of, say, finance, or supply chain efficiency, innovation leadership is an entirely messy affair. Rather than enhance predictability, innovation, as a process, embraces uncertainty. Rather than encourage decision making through elimination and validation, it requires thorough exploration and experimentation. Rather than rely on data and knowledge, it requires empathy and insights. Gasp.
The differences between innovation and traditional management sciences present leaders with a vexing proposition. To succeed, you are told, you must keep your feet in two places at once: Executing today’s business model on one foot, while discovering tomorrow’s on the other. Absent in the small print are instructions on how.
This is a balance managers struggle to master in the best of times. Add disruptive innovation initiatives and “a-thons” into the mix, and things only get worse. As more innovation “initiatives” are installed in a firm, the number of moments during which leaders are exposed, and for which exceptional leadership is required, multiplies dramatically. And if your leaders are unprepared for either, the chances for success (and your innovation culture) deteriorate with equal speed.
What to do? One popular approach to fix this problem is the purchase and adoption of one of the "innovation leadership" competency models on sale in the market today. The problem with this approach is a matter of relevancy and usefulness: while competency models describe what innovative leadership behaviors look like in general terms, they fail to describe how to recognize when they are appropriate to use at your firm and, more importantly, when they are not. This imprecision is particularly harmful in the realm of innovation. By way of example, consider the much ballyhooed behavior, “Celebrate Failure." This reads well in a book on innovation leadership, but it is precisely the wrong action to take, for example, when the “failure” was caused by Ego, entrapment, or poorly a designed experiment.
Identify the moments that matter for innovation.
So, now what? The answer: To re-invent the firm, first re-invent how leaders are engaged to lead innovation.
Begin innovation leadership development with a thoughtful analysis of the pivotal leadership moments that will arise as you embark on a stated innovation strategy. This analysis can be done at the enterprise, region, business unit, team level, and even role-specific level. Once the moments are identified, they can be paired with the leadership skills and actions that are essential in that particular moment.
For example: If your strategy calls for using stage-gating software to stimulate innovation, then you might begin by mapping out the pivotal leadership interactions and moments that are likely to arise as the software is used. From here, it becomes easier to determine what the right leadership actions are for each moment, rather than as general (and abstract) ideals. From here, support tools and processes can be put in place to allow for meaningful practice. Moreover, the leadership skill can be matched directly to the specific innovation systems and tools the company intends to put in place, thus increasing the probability that those systems and tools will work as intended.
Boldly into the great unknown.
In summary, the late Steve Jobs famously noted that great innovation “is about the people you have, how you're led, and how much you get it.” “Getting it” doesn’t mean outsourcing innovation capability to Jams, software, or consultants on roller skates. It means developing leaders able to recognize and own their role in crafting an environment in which innovation initiatives can hum. Doing so requires the confidence and capability to recognize the moments that matter to innovation, and take the right action when they occur – both in and out of the washroom.