 |
|
10 Un-Commandments of Corporate Innovation
| Innovation tends to come into vogue every few years with the popular media coming out with a host of most innovative companies, management gurus talking about innovation best practices and various research studies that point to the impact of innovation on revenue, shareholder returns, etc. You get the point. Lots of fluff. With all the talk of innovation best practices, we thought we’d offer our 10 Un-Commandments of Innovation. These are basically the things we try not to do and hope others will join us in avoiding. | | Un-Commandment #1 Thou shall not overuse words like ideation, anything 2.0 and wisdom of crowds
When innovation becomes the rage, it is usually accompanied with an annoying new vocabulary which people incessantly use to sound smart. During the “dot com boom”, B2C and B2B marketplaces and e-tailing were all the rage. Now innovation talk tends to use new words like ideation which really is not a word at all but which consultants love. Or there is the ever popular “2.0” (read: “two dot oh” or “two point oh”) which people append it to anything to make it seem new and fresh. And then there is popular ‘wisdom of crowds’ idea which has become ridiculously adulterated with everyone using this for any variety of purposes including launching inane businesses. Social networking, software as a service, business intelligence…the list goes on, but you get the point. Some of these already are or will go onto become major forces in shaking up industries, but refrain from overusing these. | | Un-Commandment #2Thou will not study Google, 3M, and P&G and assume you can emulate their “best practices”
Here’s a favorite one consultants love to hawk and it goes a little something like this. Let’s find elements from each of the “best-in-class” innovators and “leverage these learnings” to develop the client’s innovation practices. We’re not saying this is not valuable. There are companies who have great innovation practices, but these should be studied as stories and not science. Innovation is not like chemistry where adding one part of Google’s practices + two parts of 3Ms + a dash of P&G will lead to innovation. It is an inherently imprecise calculation.
Innovation ultimately is a very ‘personal’ thing for an organization and the innovation agenda or innovation program must be developed considering the organization’s people, culture, incentives, processes, past performance, and the list goes on. Getting innovation is for lack of a better phrase a “multi-variable problem” and so boiling it down into simple practices taken from ‘innovators’ is a waste of time. | | Un-Commandment #3Thou shall not assume that management knows everything
There’s that book title that says “What Got You Here Won’t Get You There” and we’ve not read it, but the title sure is appropriate when talking about innovation. There are good ideas sitting sometimes deep within your organization or even sometimes in the minds of customers and suppliers. Figure out a way to tap into this. Management with their necessary focus on the hear and now (after all, a short-term focus ensures you will be around for the medium- and long-term) may not be as knowledgeable in all the new developments and ideas that exist or that need to exist in the marketplace. | | Un-Commandment #4Thou will not bet on one big innovation to save the day
So you think you have a great idea. Now it’s about throwing enough resources at it to make it work, right? WRONG. Money doesn’t buy innovation. You need the right people, the right processes and ultimately, you need a portfolio of innovations as there are no guarantees when it comes to innovation. The point to be clear on is that the frequency of getting innovation right is not as important as the magnitude when you get it right. In plain English, if 9 of 10 innovative opportunities fall flat, but you learn from them and 1 hits really really big, you will likely be fine. The key is to ensure the portfolio of innovation is sufficiently diversified and going after the right types of opportunities.
So don’t throw money at innovation. Don’t make initiative owners fat with cash. Treat innovation like a startup and don’t expect a five year plan for an idea as innovation will zig and zag quite a bit from the idea to the final outcome. | | Un-Commandment #5Thou shall not assume that everyone is an innovator
There is a concept about organizational ambidexterity which works very well here. The guy who is great at hitting his numbers quarter after quarter is an executor. He or she, however, may not be suited for the exploitation and entrepreneurship required to launch a new business or innovation. This is not a bad thing – it’s just reality. Organizations need both types of people to thrive over time. | | Un-Commandment #6Thou shall not be happy with only incremental innovation
Changing pricing, product features, the color of the packaging, etc may all be requisite and good business decisions but don’t be fooled into believing that these incremental or flavor innovations will be enough. Continue to do these but ensure that a portion of the innovation agenda is focused on the longer term disruptive types of innovative opportunities. | | Un-Commandment #7Thou will not do inane cost-benefit analyses for disruptive innovative ideas
If an opportunity is truly innovative in a disruptive sense, your cost benefit analysis will be wrong. So instead of sharpening your pencils and determining the 10 year cash flows of the opportunity, focus on the market opportunity and ensure that if it works, the opportunity could be big. Innovation is about creating optionality to some extent. Will getting into a particular business or creating a certain innovative product or service give you an option on a potentially large market opportunity? That is where the analysis should be focused. | | Un-Commandment #8Thou will not cut innovation funding when times get tough
When times are good, we often assume that they’ll continue forever and fail to innovate because of this misconception. When times get tough, we focus on the core and assume investment in innovation is non-essential. Irrespective of the economic cycle, there should be resources dedicated to exploring innovative opportunities all the time. Protect these resources because knee-jerk cuts to them is akin to selling your children. | | Un-Commandment #9Thou will not assume it is all about the ideas
Ideas are important but they are only a start. Do you have a process to capture and scrutinize ideas from around the organization? Do you have people who can execute on the ideas? Money, time, energy can all be expended to no avail without the bridge known as execution. This means disciplined gating of projects to ensure they are delivering and to reevaluate ideas and improve them. It means that senior leaders are given specific goals on making innovation happen and not relegating innovation to the “mad scientist” who nobody really listens to (although they maybe should). | | Un-Commandment #10Thou will not start an innovation effort without building it into senior management’s and all people’s performance criteria
People do what you pay them to do. If all your incentives are about the core business and short-term in nature, people will not focus on medium- and longer-term innovation. It really is that simple. So you should figure out ways to incentivize senior management and all people to innovate by evaluating them against such measures and having it impact their compensation, promotions, etc. This will get innovation truly onto the radar. |
|
