Wednesday, June 11, 2008

You can't innovate if...

Tolstoy had a famous saying that all happy families are all alike, and every unhappy family is unhappy in their own ways. Likewise, successful innovators are usually very much alike, and firms that fail often fail for a variety of reasons. However, we've compiled a list that we believe represents a significant number of the barriers to sustainable, repeatable innovation.

As we believe you learn more from failure that success, here's a list of reasons that many firms can't seem to innovate:

  1. Leadership - while senior managers talk about innovation, the evaluation structures, compensation, investment and other factors necessary for innovation to succeed simply aren't provided.
  2. Culture - often, even if a management team wants to be innovative, and is willing to provide resources and funds for innovation, the culture can't change quickly enough. Most firms have a bias towards idea generation and innovation, or towards cost and risk control. Firms with the latter bias are rarely innovative - it simply isn't in their nature.
  3. Expectations and communication - often there is dissonance between what the executive team wants and what gets filtered down to the average worker bee. If we clearly communicate the need for disruptive ideas and that communication is received and understood, and the culture reflects those requirements, a firm can be innovative.
  4. Commitment - few firms succeed with part-time innovators. Either decide to commit or hang up the cleats now. If you are familiar with the story of the chicken and the pig at breakfast, we need "pig" like commitment.
  5. Funding and transition - many firms are able to generate ideas, but they aren't able to transition them to commercial products or services because there was no ownership in the ideas from the product teams or no funding available or the list of projects was simply too long. A defined innovation process flow - from concept to product or service - is required
  6. Fear of risk, change and failure - Innovation requires that you introduce risk into the business. It requires changing existing processes. More than likely, some ideas will fail. If your firm can't stand these risks, then become a fast follower.
  7. Lack of vision - To be an innovator, you have to have a vision for the future - what unmet needs or undiscovered markets may exist and how can we exploit them? If you don't have the vision, there are ways to acquire that insight, but you've got to have it.
  8. Thinking of innovation as a project rather than a competency. Most businesses are organized around persistent business processes. It's clear what people aligned to those processes need to do each day to make the business hum. However, many firms are very comfortable creating finite innovation projects -here today, gone tomorrow. There's no clear process and continuing effort around innovation, and given the risk and effort, as soon as the project is over, innovation is dropped.
I doubt this is an all inclusive list - feel free to add your own as you see fit in the comments. However, these are the issues that we see most often as reasons for failure when firms seek to innovate.
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posted by Jeffrey Phillips at 1:52 PM


Anonymous K.S.Ramachandra said...

Innovation doesn't happen as other processes like QA&QC or any other "essential processes" (that meet day-to-day needs of the business) happen in a company, This is because more or less all these process are very well understood by all concerned with roles and responsibilities defined and everybody knows that if these are not done the business comes to a halt and all will lose their living. But "Innovation" as a process has not achieved such "essential process" status in most of the organizations and the consequences of not doing innovation will not be as immediate and as apparent as the above processes to either the top management or he line managers. This is true, inspite of the organization having well worded and communicated vision and mission statements as I have found it is seen as another addition to many such slogans/policy statements on ,quality, environment, CSR, responsible care bla.. bla…bla… The consequence will only be known to at least top management when it sees a big downslide in business resulting from competition and innovations happening in the market, but by then it would be tool late to react .I can further emphasize my point on this issue with a specific illustration: A pharmaceutical company will have policies and vision and mission statements on every relevant thing to its business including “Innovation” and will have communicated them to both external and internal people.
When its products are required to be marketed in US and when they are required to get US-FDA approval for its products and processes the top management takes it on war footing and provides all necessary resources and the processes of establishing, implementing and auditing will all get done at the direct overseeing of top management and ultimately the unit may get approval from US-FDA boosting the company’s export business.The company continues to maintain the status always complying with the requirements and it gets the status of “essential process” in the company. The company did not make the US-FDA approval requirement as vision or mission statement and hang it for everybody’s information. But rather it took this requirement as a major task and achieved which the company knew for certain that it will directly impact on its business in future. However, the company’s vision/ mission statement on innovation is still hanging at all places without anybody’s serious concern.

The above establishes that only when the top management appreciates the need of anything which it believes will have major impact and contribution to its business and a mandatory for its survival, it sits in the driver’s seat with all resources and might till the objective is achieved. Will it be the situation in respect of “Innovation” as an initiative in most of the organizations? I think , a honest answer from 90% of the organizations will be “No”.

Hence, it is not vision/mission, or any policy or slogan on innovation communicated by the top management that gives results, it is the top management’s commitment and seriousness and whether it considers innovation as a necessity for survival and profits. If the answer is affirmative, then the top management will become the driver.

This simple analysis shows one of the major reasons why innovation does not gets its due importance and support for it to become a part of the culture

1:07 AM  
Blogger Damon Yudichak said...

Looking only at your list I would say that the two drivers of innovation are the leadership and the culture. The rest of the list becomes evident as a result of the leadership and the culture. Leadership has a huge impact on influencing the direction of the culture. Based on the leader’s words and actions the other members of the culture are able to create norms, values and roles. Culture is the most important aspect to driving innovation. The wise leader recognizes the power of culture and he/she nurtures the culture by word and deed to ensure that the culture develops into a culture of innovation. If the leader wants to create a culture of innovation, there are a number of things they can do to create that culture.
1. Build an Innovation Hub
2. Hire a Knowledge Seeker
3. Construct Implementation and Transition Norms
4. Foster Creativity
5. Create an Effective Reward System
6. Recruit and Retain Employees
7. Cultivate a Community of Support
8. Promote Bottom-up Initiatives
9. Accept Failure

2:01 PM  
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Blogger felicity said...

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