A couple of years ago, I had the opportunity to setup a nimble team of super-talented folks to help our customers rethink and solve some of their biggest business challenges. In the process of setting up the team I had a long conversation with a good friend and colleague to get his insight and advice. At the end of our chat, I asked him “by the way, what do you think my new title should be?” He replied back swiftly and said “whatever it is, make sure it doesn’t have the word innovation in it”. I was a bit taken. Why wouldn’t I? That’s a big part of what our team does. His response: “Those are always the first people to go”.
For a few minutes I was a bit stumped by that remark. At a day and age where innovation and creativity are touted all over the headlines as the Holy Grail to a company’s success, why would innovators be the first to go?
We gravitate to the predictable and measurable
Leading thinkers such as Clay Christensen attribute our obsessive focus on metrics to prioritizing mainly incremental improvements that deliver faster, predictable returns. If we can add some features and maybe tweak the packaging; we hope to see revenues increased and interest renewed. This is what Christensen defines as incremental innovation, built upon what has historically helped companies succeed. Yet this is the very flaw that opens up the door to “disruptive innovations” at the bottom of the market as companies release entirely new products, categories and services that create real corporate and economic growth.
The left side of the brain still rules in business
Roger Martin, former dean of the Rotman School of Management said “We live by adages like: “Show me the numbers” and truisms such as “If you can’t measure it, it doesn’t count.” While we are proud of our spreadsheet models and our ability to predict the future based on the past, using only the left side of the brain, he says, is that the analysis of past data can only, at best, produce reliable incremental results – not game-changing ideas and fundamental steps forward.
Our schools and organizations instill a predictable mindset
Innovation is counter-intuitive to what we’ve been taught in business schools. Most of the folks at the helm of organizations are MBAs or finance types that have been taught and came up the ranks managing predictable businesses based on metrics. We’ve thoughtfully designed the modern organization to produce predictable outcomes, increasing reliability and reducing risk. Innovation is an unnatural act within the current system and metrics-driven mantra. The chart below, adapted from Jeanne Liedtka’s book Designing for Growth shows the distinct differences between how MBAs approach things as opposed to how Innovators do.
Understandably so, executives who take a “show me the numbers” approach to innovation see expensive experiments, lots of novelty, lack of planning and worst of all, no defensible numbers (at least in earlier stages) to justify the big bucks being spent. In their eyes, innovation seems like a boondoggle and a logical place for cost reduction when times get tough. As a result, ideas get killed before they ever have a chance to take flight.
Back to my story: I didn’t take the advice and instead ordered a fresh batch of business cards with my new title.
A few weeks later, my phone rings. I got called to the table to answer all sorts of questions around how we measure the impact of group and how will we scale it globally? I was very fortunate to have overcome the challenge at that point by playing the metrics game and taking a personal risk to justify why we shouldn’t be shut down the next day. Nevertheless, lesson learned!
While we are turning the corner on the significance and ability to innovate with leaders such as Christensen, Martin and others who have been shouting from the rooftops to point out this major gap to senior executives, innovators have a steep hill to climb. In most organizations creative destruction remains part of business-as-usual and anything that looks fuzzy, usually goes first. By no means is my intent to discourage smart and creative people to step up into these critical roles, but if you do, consider the following:
Start small and grow something tangible before going “public”
There’s something to be said about taking a skunk works approach to prove out a new concept or business model. While this won’t apply to every industry, if you have the opportunity to start small and operate under the radar in order to produce tangible proof of early success, do it. It’s better to under-promise and over-achieve as opposed to taking on a big title with an uncertain scope while the clock is ticking against you.
Establish your goals and measures early on
Yes, some things are just darn impossible to measure in innovation. Nonetheless, spend time thinking through your pitch, goals and how you would measure success. Even through things may change, it’s never too early to defend your project and poke holes at your plan from the angles of desirability, viability and feasibility.
Choose companies that get innovation
While many companies are not designed for innovation at their core, there are in fact, quite a few that do and have it engrained deeply into their culture. History is usually a great indicator of the future so take the time to dig deep and research the company’s successes (and failures) with innovation and how certain situations have been handled.
Finally, there really isn’t a prescription here. Running the day-to-day organization and focus on achieving a short-term objectives allows us to keep the lights on while we work on exploring the next big thing in our industries. Metrics still play a very key role as you certainly don’t want to run the business blindfolded, but when it comes to letting innovation flourish, we need to leverage more of an equilibrium between the short-term business objectives and innovation to truly understand which bets to make, which to keep and which to grow.
Have you held an “innovation” type of role? How have things worked out?
If you liked this post, feel free to visit my blog www.reuvengorsht.com for more on strategy, change and disruptive thinking.