Senior innovation leaders confirm that after years of talking about innovation, they are still struggling to integrate customer/market perspectives into the innovation process
Amphora Consulting recently completed a survey of 20 senior innovation leaders. Our findings support the perspectives shared below. Complete results of the survey can be found here.
Innovation is and continues to be a hot topic. There is certainly no shortage of material written on the subject: about 70,000 books by one estimate. And there is no shortage of advice. A recent Harvard Business Review article went so far as to suggest that maybe there was so much baggage that we should stop calling it ‘innovation.’ More common is the advice to create an innovation leader and charge them with reinvigorating growth. For example, a 2017 article on innovation suggested: “Select one person and give them a clear mandate – and budget – to deliver innovation. When you define their role and empower responsibility, you will deliver results.” Yet there is an emerging consensus that this is not a one-person show.
Our recent survey of senior innovation leaders supports this consensus. First of all, the Chief Innovation Officer role is relatively new, in more than half our respondent companies, if the role existed it had been created in 2018 or later. Further, the specific responsibilities and expectations for the role are still in flux, with our respondents reporting very different responsibilities and objectives. Most importantly, the number one reported opportunity for improvement was cross-functional collaboration to drive innovation. While our respondents indicated that their organizations were relatively mature in dealing with the mechanics of tracking innovation, for example, stage-gate and portfolio management; they also reported that integrating customer and market input into innovation continues to be their biggest challenge.
Assuming that putting someone in charge of innovation will yield positive results may indicate a deeper problem in understanding how innovation actually happens. Specifically, we believe the tools and techniques that deliver efficiency improvement have been mastered by most organizations but will never deliver innovation. In fact, the very instincts that many leaders have refined through successful careers will not work, including the tried and true, “if there is something that needs to be improved, put someone in charge of it and hold them accountable for measurable results.” This probably explains both the increase in the number of Chief Innovation Officers and their mixed track record thus far.
The reason we feel so strongly about this is summarized in what we have come to call the fundamental paradox of innovation:
Directly from ‘Grassroots Strategy’:
“This difference bears repeating. You can order someone to turn in their expense report by Friday, and maybe even threaten to withhold their reimbursement check if they don’t comply. But you cannot order someone to come up with the next great product idea by the end of the week.
Yet, too many companies unwittingly try to force innovation using the management tools and techniques that work in the rest of their business. Invariably, they end up with incremental, low risk ideas and no big wins. Thinking differently and questioning implicit assumptions takes time and, in some organizations, courage.“
Reviewing the survey results, we have become more confident in our assertion that centralizing innovation in one department not only won’t work, it may actually do harm because hundreds of smart, creative people now think that innovation is ‘someone else’s job.’ The good news is that the innovation leaders surveyed have come to this same realization. What they are still figuring out, however, is how to rally the rest of the organization to build a culture of innovation.
If traditional management tools of budgets, incentives and deadlines won’t work, what will? Well, clearly, there is no magic bullet. Success starts with recognizing that innovation always contains an element of serendipity – the right person being in the right place and connecting the dots in a way that no one has before. While this can’t be scripted in advance, you can go a long way by creating the environment where the right kind of interaction is more likely to take place.
This starts with acknowledging the lesson that most companies learned years ago with ‘quality.’ It is not a department, rather it is a true cross-functional capability. Success requires everyone realizing that it is part of their job. Some suggestions include:
- Define what good innovation looks like using a common vocabulary built on the principles of Grassroots Strategy – make sure that funded innovation projects have a compelling strategic logic, not just a good spreadsheet.
- Broaden where your teams are looking for growth ideas – while many ‘ideation’ exercises are a waste of time, it is essential that teams break out of incremental, customer-driven product-centric ideas. Make it clear that innovation includes questioning your mix of not only products, but services, delivery channels and business models.
- Encourage cross-functional cooperation and sharing, since no one has a monopoly on good ideas – too many stage-gate processes include a market assessment at gate one and then focus primarily on technical feasibility. In contrast, great innovation requires a two-way dialogue with those in the market and those in the lab communicating continuously as assumptions change.
- Champion innovation across the organization without letting it devolve into a template-driven requirement – many in our survey realized that it is more powerful to make tools and training available and encourage their use than it is to mandate compliance which can lead to a ‘check the box’ mindset.
- Align existing processes with market-back thinking to inject the customer’s perspective throughout the process – you cannot create an innovation culture by ordering it to happen, but all too often existing processes actually discourage the right behaviors. Acknowledge the past and change the processes that are hindering innovation.
- Tolerate failure but not sloppy thinking or repeating avoidable mistakes – one key element is a visible backlog of early stage project/ideas. At the risk of stating the obvious, no one will offer to kill their project if it means they might not have a job next week. When killing a project is rewarded with the chance to work on an alternative project with higher potential you stand a much better chance of seeing objective go/no go decisions.
For many companies, this is nothing short of a cultural and organizational transformation, and transformations take time. Success requires leaders to practice both patience and humility, characteristics often in short supply in leaders who have built their reputations on confidence, quick decisions, and high expectations. A culture of innovation takes consistent leadership from the very top – even superhuman effort by the best innovation leaders will likely fail if the Board/CEO above them is judging performance only on making the current quarter.
Our advice is to take a deep breath and repeat: “innovation is different.” You don’t know all the answers, but done well, it is possible to unlock the power of your organization. When we wrote ‘Grassroots Strategy,’ the analogy of the backyard gardener stuck with us. You can provide the right environment, but you cannot order seeds to grow on your timetable. Leaders would be well served to think about innovation the same way. So, roll up your sleeves, put on your boots and gloves and keep working the soil!