Friday, September 26, 2008

An Innovation Work out

If you are like me, you have kids who are active in sports. My daughter loves soccer more than anything, and is constantly practicing - at practice and at home. Just a few days ago I watched her juggle (keep the soccer ball moving in the air using her feet, knees, chest and head) for over 100 touches. That seems fairly miraculous to me, since I don't have that skill, but she considers it an ability grown out of constant practice. She has gained the skill through constant work and application.

I'd like to think that there's an analogy there to innovation and what our expectations are about the capability of individuals and teams to innovate. Most of the time, our teams are called on to "innovate" in a crisis, with little advanced warning and no practice time. Most of the people involved have rarely, if ever, innovated and are unfamiliar with the techniques, methods and thinking models that enable innovation. We ask them to innovate without any practice or warmup - and the results are about the same as when I try to juggle a soccer ball. To my credit I can get about ten touches, but there's little grace or beauty in what I do, and it usually results in a quick failure.

In no other business function do we ask people from a cold start with little to no experience or preparation to take on such an important function. It's little wonder that people are often concerned about being involved in an innovation project - they understand the challenges and often feel they are unprepared and don't have the luxury of a learning curve. So they press their way forward, learning on the job, making avoidable mistakes and achieving some modest level of success, all the while recognizing the potentials that exist if only they were familiar with the tools and techniques.

However, in most organizations the folks who've done this once rarely get to repeat the exercise, and a whole new crop of innovators takes on the next innovation initiative, with little preparation and modest results. You wouldn't pay to see the Yankees or the New England Patriots if they were staffed by people they recruited off the streets at the last moment to play - we pay professional athletes because they have the skills and knowledge to play well above our level. Why would we expect or tolerate anything less in what everyone says is a top three management priority in our businesses?

If your management team is serious about innovation, then it will train the individuals who are responsible for innovation and engage those individuals on a regular basis so their skills and knowledge improve and innovation tools and techniques become second nature. Without training and constant exercise to reinforce and improve innovation skills, it's exceptionally difficult to innovate well over any period of time.
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posted by Jeffrey Phillips at 2:16 PM 5 comments

Wednesday, September 24, 2008

The difference between corporate and business unit innovation

In a famous children's book, Dr. Dolittle encounters the rare pushmi-pullyu, an antelope with two heads, one on the front of its body and one on the rear. The animal has a hard time getting anywhere because both heads want to go in different directions. What I've discovered in working with a lot of organizations is that the corporate team and business unit teams are a lot like a pushmi-pullyu - both want to innovate, for different reasons and purposes and have different motivations and concerns.

The corporate or staff team want to innovate because they understand how important innovation is to the CEO, and how necessary innovation is to the organization for growth and differentiation. They see themselves as the keepers of the strategy, and believe innovation can be important and disruptive. The challenge that the corporate innovation team has is that it is rarely if ever responsible for actually producing a product or service. This means that its great ideas often struggle to be considered or implemented by the business units. The corporate teams understand the need for innovation and how it should align to strategic goals and direction, but have a hard time institutionalizing innovation or doing the tactical, day to day tasks of innovation.

People in the lines of business understand that innovation is important. After all, they compete against other firms and their offerings, and are reminded constantly about the need for new products and services. However, the business lines aren't compensated on spending time thinking about products, services or business models that won't materialize for two or three years - they've got to make the quarter happen. So, while they have the means to conceive, build and deliver new products and services, they don't have the bandwidth, time or means to focus on those issues. And all the while, corporate is giving them great new ideas which are simply added to the long list of tasks on their plate.

There should be an easy answer to this - a corporate team focused on longer term disruptions that are suggested by the business units that simply don't have the time or bandwidth to focus on what's next, and a corporate team that provides trends and strategy insights to business unit teams to extend their visibility. A corporate team can provide resources and funding to assist the business units with their mid and longer term innovation needs and take on the creation of new markets or "blue oceans". What the business units often struggle with is the knowledge that they need to innovate, but simply don't have the people, time or resources to innovate consistently. That seems like an obvious answer - so why isn't this being engaged more effectively?

Most likely there are a couple of reasons. First, while CEOs and executives talk about innovation, they aren't measuring it. So everyone understands that as long as we appear interested in innovation, and achieve the quarterly numbers, that's acceptable. Once the senior executives get serious about measuring innovation - what ideas have been created? what new products or services conceived and developed? What impact on the bottom line once they are launched? Who is innovating and who isn't? - then the demand for innovation resources and dollars will exist within the business units. Where will that capability come from? Let's hope it comes from a team aligned with core strategy who has the bandwidth to look out three to five years, not 45 to 60 days. Let's hope that team has a method that can be applied across the organization as a relatively standard approach, so we aren't reinventing the wheel each time. In other words, let's build a small corporate team and outfit them with the processes necessary and the tools to enable innovation at corporate, and in the business units.
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posted by Jeffrey Phillips at 12:21 PM 4 comments

Friday, September 19, 2008

One Critical Innovation skill

We frequently hear some people (and by extension some firms) say that "they aren't innovative". Yet innovators, and successful innovative companies, come in all shapes and sizes, are found in every industry and geography. When your firm decides to become more innovative, there's only one really important criteria for the innovation manager or leader - the willingness, if not the desire, to do things differently.

As Hamlet would say - there's the rub. For the last decade we've been taught to create standardized processes and follow them closely, eliminating any variability. Now, we're asked to innovate, which requires change and risk and uncertainty. This conflicts with all we've been taught and all that's been reinforced over the last few years. What are the alternatives?

Well, you can anoint an innovation lead who accepts and reinforces the Six Sigma way of thinking. New ideas are fine, as long as they adhere to certain important principles. No new or risky methods or approaches. Financial analysis of all ideas as quickly as possible. Little divergent thinking. No incorporation of outside perspectives. In other words, we'll manage innovation the way we manage everything else.

Or, you can find someone to manage your innovation process who encourages his or her team to think differently, to intentionally violate or break the accepted norms, to consider the "what-ifs" that the rest of the organization ignores or takes for granted. Yes, it is much more difficult to manage in this style in most organizations, but ultimately the success or failure of an innovation effort is based on how it is managed and framed.

I heard a CEO speak recently about how disappointed he was that all of the "big" ideas in his organization kept becoming "small" ideas. That happened when a big or really disruptive or interesting idea came into contact with the existing norms, perspectives and expectations, and gradually the idea was confined, constrained and chipped away at until it was "tamed" by the culture. What had been a great, transformative possibility became a safe, easily dismissed idea.

We all know that Einstein suggested that insanity was doing the same things over and over again and expecting different results. It seems that's what most organizations insist on when it comes to innovation - let's manage a very different process in the same way, using the same thinking and same people - to try to drive some very different outcomes. And then they wonder why all the ideas seem so trivial.

Innovation is not simply a matter of thinking differently - it's a matter of managing differently. In fact, the thinking part is the easy part. It's the change in how we manage that's difficult and ultimately divides successful firms from the rest.
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posted by Jeffrey Phillips at 11:24 AM 6 comments

Thursday, September 18, 2008

Why Johnny can't innovate

Do you remember the mantra from about a decade ago? Many of us were wondering why "Johnny can't read" or why "Johnny can't understand math". This approach was meant to expose the fact that many kids were graduating from school without the capability to do the basic functions that seemed necessary and prerequisites for graduating. Today, many CEOs ask the same things about their companies - Why can't we innovate?

There were a number of reasons that Johnny couldn't read - poor teachers, poor instruction, lack of preparation, no incentives to do well in school and so on. Perhaps as well there were social stigmas for doing well in school, or perhaps some of the kids had dyslexia or other undiagnosed problems that made it difficult for them to learn to read. In any complex problem there are usually more than one underlying challenges or root causes. The same is true with innovation.

First, let's just say that for many of us, we can innovate. It's not a failure of the individual that innovation isn't happening more consistently in most businesses. If anything, in our experience, most people are frustrated at the pace of innovation within their firms and feel trapped by the bureaucracy and decision making. So, Johnny can innovate. It's usually the company that can't.

So, if we accept that many people are interested and engaged in innovation at a personal level, where's the disconnect between that initiative and drive and the fact that innovation isn't more prevalent? Most companies, intentionally or not, erect barriers and inhibitors to innovation. Here are just a few:

  • Most people work within one business unit or function, but often innovative ideas combine capabilities from several functions or business units. While we are optimized to work within a business function or unit, many firms struggle to work well across business units or functions
  • Most people are compensated on a specific set of goals. Rarely does the compensation include any aspect of innovation. So, while we ask people to be innovative, we compensate them for their "regular" or "day" jobs
  • Innovation requires change and risk, two factors that most firms try to eliminate from day to day operations. Failure, change and risk are career killers in most firms, so few people have the strength of will to attempt them.
  • The pressure from Wall Street for quarterly earnings is so high that few organizations do a good job looking at evolving trends and new opportunities. Even the firms that do look further out rarely look more than 18 months into the future, often less than a full product cycle.
  • Most businesses have optimized their staffing and processes to the point where there is no slack in the system. It can be difficult to squeeze in a meeting with a senior manager, much less find the time to explore a new idea or concept in any detail.
In the face of all of these intentional and unintentional barriers, is it any wonder that many firms struggle to create interesting new products and services, much less innovative products and services? Johnny, and Suzy, and Mary, and a lot of the other folks in your organization can innovate, and many of them are ready and willing to do so. What does your organization do to either enable them to be successful, or place obstacles in their way?
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posted by Jeffrey Phillips at 7:01 AM 7 comments

Tuesday, September 02, 2008

Creating Innovation "pull"

As I work with a number of senior executives, it's clear that they want their organizations to become more innovative. Some of them talk about the importance of innovation so much that I think it becomes a distraction, especially since innovation is usually poorly defined and abstract. Also, in some cases innovation becomes the strategy rather than an enabler to achieve other goals or strategies like organic growth or strategic differentiation.

So, in many companies, the strategy for encouraging innovation is what I'd call innovation "push" - the senior leadership will push innovation into the business. What I'd like to recommend, and what I think you'll find is common in most successful innovation firms, is what we call innovation "pull". Rather than talk about the importance of innovation, what I'd like to see more firms do is simply place a requirement for growth or differentiation in each line of business, business function, product team or other organizational unit. For example, we could tell each line of business that we expect it to grow X% next year, and that each line of business should indicate what innovative products, services, business models or tactics it will apply to drive that growth. Or, stealing a move from 3M or P&G, we could set an expectation that X% of all sales must come from products released in the last 18 months. The key is to move away from advocacy to real plans and measurements.

This creates pull - because now the businesses or product groups have to identify innovative products or services, and have to demonstrate the results of their innovation efforts. Building innovative programs or initiatives into the plan for the year, or for several years, and then demonstrating the actions and outcomes and being measured and rewarded for those efforts is what will create innovative thinking and efforts in the company.

When the teams are expected to innovate, and measured on innovation, and rewarded based on their work and efforts, then there's much less need to push innovation - you've created the incentives for innovation to take hold and succeed - now you'll need to provide the resources, processes and people to make innovation successful.
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posted by Jeffrey Phillips at 2:26 PM 10 comments