If Innovation is central to most companies' strategy today, why do so many of them trail behind the product/service/market trends even after having a dedicated Innovation function within the company? I believe it has a lot to do with simple semantics and by developing a common language for all, better results will follow.
Maybe we need to stop using the word Innovation? It feels like we are being bombarded by this buzzword so much it's starting to lose its meaning. It now feels like lip service or a replacement for saying things like "extra work with not many results" or "trying to cut jobs or overhead." There are also so many speakers, authors, or new consultancies that are out there touting its' merits while at the same time companies having trouble implementing it or even understanding what it is, for that matter. In its' current incarnation, I see how we can regard it more along the lines of 'innovation theatre' than actually how 'real' business gets done. Although I believe the main issues here stem from both sides of the spectrum; Where companies and executives are holding on to the past for too long, and the experts are out there over-complicating it with jargon-filled advice and esoteric concepts. I suggest we zoom out a bit to understand some of the basic tenets of Innovation to start the conversation again, get a little more comfortable with the term, and perhaps even come up with some new names for it.
Innovation is Everywhere
The global consulting firm, Board of Innovation, estimates that there are about 70,000 books on Innovation available for purchase right now. If you read at a pace of 20 pages per day, it would take you about 2,397 years to go through them all. I just did a Google search, and it yielded nearly 2 billion results. At the same time, the Harvard Business Review offers 4,858 digital articles and 10,192 case studies. Innovations public profile is also matched by its' urgency within Boardrooms. The 2020 C-Suite Challenge Report, published by the Conference Board, listed "building an innovative culture" among the top three most pressing internal concerns of 740 CEOs surveyed globally.
From a Business Perspective
Whether in the classroom, the boardroom, or on the bookshelves, Innovation is one of the hottest topics worldwide. So, where is the disconnect between what thought leaders expound and how most of us and our companies operate today? From a company perspective, I think that a lot has to do with the fact that we humans don't like change; we abhor risk, and we indeed hate to be seen failing. Unfortunately, these three things are at the core of any innovation project. By default, I think we also cling to the old levers of driving a business, whether by adding to the sales team, increasing the marketing budget, or simply just trying to cut costs. I believe that going straight to these types of tactics means you have lost the plot and are probably asking the wrong questions. Here we need to get off autopilot and ask harder and more outward-facing ones: What's the changing market context? How are buyers' behaviors evolving? How should we respond to competitors? And are we listening enough to our customers? What new capabilities would serve them better? Financial reporting plays a part as well. The short-termism of financial markets and their corresponding reporting instruments stifle many ambitions executives may have to innovate. According to the godfather of Innovation theory Clayton Christensen, "Executives in established companies, bemoaning the expense of building new brands and developing new sales and distribution channels, seek instead to leverage their existing brands and structures." In layman's terms, he means financial metrics kill great ideas.
From an Innovation Expect Perspective
Now let's talk about the innovation experts' point of view. They understand that having a growth innovation center at your company's heart is the only way to future proof your business. No doubt, they are correct. The rate of change is so fast that gone are the days where incremental improvements will keep your competitive advantage alive. Today it's more about impactful and transformational advances. Reducing, streamlining, digitizing, leaning into sale operations, making processes smoother, removing silos, and putting the customer first are just some things that need to be quickly learned and relearned in an iterative process. Agile project management with rapid learning cycle frameworks, a customer-centric design culture, and separate self-directed teams will soon become part and parcel for modern organizations. Then throw in concepts such as circular design, sustainability, and future scenario planning, and it's easy to see why your head can start to spin.
The 7 Key Roles of Innovation
I know that's a lot to take in, but you can see how these two divergent perspectives may have trouble seeing eye to eye. So, I suggest we back up a bit and take a high-altitude view of a Chief Innovation Officer's actual job description to help us with a new, more comfortable digest spin on the concept. Here is a framework developed by the European Center for Strategic Innovation that identifies the seven key roles that define the CIO's mission. It has been an excellent reference for me.
1. Supporting best practices. This involves scouting and standardizing market research methods for novel ideas and insights; strategic Innovation, promoting open Innovation; and introducing group tools and processes that encourage creative thinking.
2. Developing skills. This is about training company personnel on the skills they need to develop and applying measures to track improvements in Innovation and the skills underpinning them.
3. Supporting business units in new product and service initiatives. This means acting as a methodology expert and facilitator for the most critical innovation teams across the company, supporting them in "raising the bar" of their aspirations. Training other managers to perform these roles also allows them to support Innovation in business units.
4. Identifying new market spaces. This includes analyzing trends and market disruptions and searching for emerging new market opportunities. In some cases, they'll need to be developed at the corporate level when they do not fit into the current business units' boundaries.
5. Helping people generate ideas. Setting up and running ideas, generation platforms, and formats like jam sessions, hackathons, and internal or external crowdsourcing for the corporation's benefit.
6. Directing seed funding, owning and allocating a yearly budget to fund "homeless ideas" that are either too risky for the business units or outside their existing business boundaries, which might not otherwise get funded. This provides an organizational home to nourish and protect new ideas.
7. Designing shelter for promising projects. Designing resource allocation processes (portfolio, stage-gate, Capex, budgeting) to take potentially disruptive innovations forward from the seed stage to the market without getting killed on the way by managers invested in the status quo.
I believe these roles will enable a better understanding between all stakeholders that will allow them to create a clear mission and coherent framework: one that is easy to understand and non-threatening. After all, Innovation only really occurs when people feel safe, trusted, and collaborative. And as far as new names, perhaps, we can call it something like 'good ideas' or 'smart business.'
Thank you for reading.