Has Innovation Become A Four-Letter Word?
See if the following story sounds familiar.
In a large company somewhere in the world, growth begins to slow, even stagnate. A senior executive, usually the CEO or CMO, attends a conference or reads an article and gets the innovation bug. He declares innovation will be the cure-all for the company’s woes.
Support is gathered from the executive team—committees are formed, commitments made, announcements shared and a budget is secured. Some companies even appoint a “Chief Innovation Officer” to demonstrate just how serious they are. The company’s website and all press releases start to include the word “innovation” (often to the point of excess).
The broader organization is rallied to the cause, told their participation and voices are essential in shaping the future of the company by harnessing the mighty power of “innovation.” Employees are asked to propose their best ideas on how to drive future growth. They are aggressively encouraged to submit these ideas to a newly created mailbox or cool new intranet site. There is a buzz of excitement in the halls: all employees finally have a chance to have their voices and ideas heard.
Simultaneously, senior executive brainstorming sessions are conducted and led by hip consultants with “look at my glasses” glasses. Ideas are doodled, drawn, written and shared, and eventually a winning one is selected, partially by merit and partially due to the lobbying of the person with the loudest voice or most sway. Since everyone in the room loves the idea they helped spawn, it is fast-tracked to implementation, where it fails dismally—usually because it wasn’t customer driven. It didn’t solve a pressing need.
The innovation committee reassembles but this time with an air of cautiousness. With a bit more care, they select another idea—this time vowing to really test it. Research is gathered and evaluated; naysayers emerge and articulate all the risks and “why nots” leading to delays and even more research. Months go by. The idea is refined and refined again, pared back considerably from its original form as fear of another failure looms. Finally, the idea is soft launched only to fail again because it has lost its edge, is too late to market, or both.
Meanwhile across the organization, thousands of employees who were enthused by innovation and who had contributed to the list of ideas are frustrated that a) their suggestions disappeared into a black hole, and b) the “bad” ideas brought to market by the bigwigs have totally failed. Those employees who were the biggest champions of change are now the most demoralized and cynical. Some decide to leave.
On the heels of these disappointments and increasing financial pressure to hit quarterly numbers, the CEO has had enough. She declares a renewed focus on what’s important, “current business results.” The Chief Innovation Officer is fired, the committee disbanded, and the ideas mailbox is dismantled.
Innovation has become a four-letter word.
Innovation overpromised and underdelivered. It became a “flavor of the month” that captivated employees’ attention and energy only to leave them feeling disillusioned and contemptuous of the “next big thing” dreamed up by the senior executive team.
But it didn’t have to play out this way.
There are companies that do it right, such as Southwest Airlines, 3M, Whirlpool and, of course, Google and Amazon.
How do they do it?
Through scores of conversations with senior executives and review of dozens of quantitative studies such as Booz’s Global Innovation 1000, it is clear that the companies that are best at innovation have created an internal environment that fosters innovation and propels it to thrive. They give life to a Culture of Innovation.
Creating such a culture from scratch isn’t easy. Transforming an existing culture is even harder—especially when the natural outcomes of business imperatives like operational effectiveness, efficiency and quality tend to remove with them the natural cultural components of innovation. Here’s an overview of the core components of a Culture of Innovation:
- Creativity: Innovation is necessarily a creative undertaking. Does your company encourage creativity? Your next big idea may be sitting on the third floor in the cubicle next to the coffeemaker, but the trick is getting that idea out into the open. To do so, you’ll need comprehensive, transparent and engaging mechanisms to incentivize and reward participation in the creation of what’s next.
- Risk-taking: Moving from a defect removal system to a carefully cultivated, creative risk-taking culture is no small undertaking, but small steps can reap big rewards. When was the last time you celebrated a failure? Every company fails, but it is the rare company that actively seeks to admit and learn from those mistakes. Providing visible examples of risks taken and open communications of the successes and failures of those risks fosters an appreciation for what the company can learn in service of growth.
- Collaboration: Gone are the days where one individual or team can take an idea and bring it to market without the engagement and collaboration of multiple departments and players, siloes and egos. When surveyed, most employees say they are “willing” to collaborate across functions, but it almost seems as if the environments of modern business were designed to prevent collaboration. Creating environments, processes and incentives that encourage collaboration are essential for preventing “death by committee” for your innovation efforts.
- Customer Focus: Creative risk-taking and collaboration are valueless unless they are in service of meeting a real and significant customer need. Here’s a wake-up call: “You are NOT the customer!” Nor is your boss, the CEO or the board. Implementing customer focus means having a quantitative and qualitative understanding of your customer segments and their personas. A shift here requires a commitment to understanding your consumers beyond their current needs to those that are yet undiscovered.
In the weeks ahead, we will explore the main cultural drivers of innovative organizations in further detail. By sharing real experiences, insights and practices, we hope to help you transform your company’s culture to one distinguished by continuous innovation.