Tuesday, August 18, 2015

Barely scratching the surface

It's funny to me to read about the impending death of innovation, or how innovation doesn't add any value, or how often you can read about new innovation methods or techniques when most people haven't ingested the basic tenets yet.  For all the talk about innovation, for all the "I'm so over" innovation eye-rolling, it would be nice to admit a really simple fact that is as plain as the nose on your face:  80% of the people in most organizations simply don't know that much about innovation.

I have to remind myself of this constantly, because I'm not going to be surprised anymore by "innovators" in organizations who don't know who Alex Osborne is, or was.  Or can't tell me what Doblin's Ten types of innovation are.  Or cannot adequately define the difference between incremental innovation and disruptive innovation.  Recently at a professional association meeting we were talking about helping our colleagues understand "best practices" in innovation.  As lofty and potentially arrogant as that sounds, my advice was to start more simply:  how about if we just ensure they know the basic practices before we worry about "best practices"?

To me it seems the best analogy for the state of innovation today is something like this:  We are like the 49ers, the Americans in the middle of the 19th century rushing to California, because it's been reported that there's gold in the streams.  A handful of people are getting rich finding gold nuggets in the streams, simply there for the finding, never realizing that seams of gold lie just below the surface, waiting for someone with vision and passion to dig a bit deeper.

Where innovation is concerned most organizations have a similar experience to many of those who rushed to California.  They make finding the gold sound simple, they send people with no mining experience into the field to find the "nuggets" lying around, and everyone gets frustrated when the exercise doesn't pay off.  Eventually, most of the 49ers end up in other roles, settling down in a new territory rather than continuing to look for gold.  We are all guilty of flirting with prosperity, toying at the edges of innovation possibility, never fully committing to discover all the value locked up just below the surface.

There are good reasons for this willful ignorance.  When confronted with a virtual "sure thing" that maintains a moderately successful status quo or risks something for a potential windfall, managers and executives will almost always bet on the "sure thing".  Sustaining day to day operations, making the numbers each quarter, not rocking the boat pays off.  Meanwhile we are expected to do some "innovation", so we send out the unprepared to search for ideas in the wilderness, never surprised when they fail to find value, even when it was right there in front of them.  Later we are shocked when competitors or new entrants mine the same fields and find seams of gold.  But by then the executives and managers who provided only lip service to the exploration are long gone, safely ensconced in new roles where they'll reinforce the status quo in the face of unrelenting change.

Where do we place the blame? And, more importantly, how do we encourage people to explore innovation beyond the surface?  There are a couple of places we can explore to create change.

First, the business schools.  Many executives and managers have business school experience, either undergraduate or graduate.  In those programs they receive training in accounting, finance, marketing, operations management, sales, human resource development and information technology.  They learn to be managers, not explorers.  We need to radically rethink the education programs for our future business leaders, who will need to combine management skills with exploration and experimentation skills.

Second, the risk-reward spectrum.  From 1945 until today, western businesses have lived in a bubble of their own design.  The US and to a great extent western Europe dominated international business and set the stage for how things got done.  With the rise of China and other countries, and the slow decline of Western Europe, the competitive landscape is changing.  The pace of change is accelerating.  While older management tools still hold true, they only hold true as long as markets and competitors respect them.  We need to innovate management philosophy just as fast as we learn to innovate new products and services.

Third, and related, is business culture.  Culture and bureaucracy create their own realities.  Like it or not these are living, breathing entities that have their own opinions about change and can enforce those opinions over a longer cycle than the average tenure of a CEO.  This means that visionary CEOs and leaders need to partner with customers and investors to shift the culture of organizations over time, with buy-in from everyone, so that the culture is forced to change, rather than ignore the signals and slowly wither.

This should be a golden age of innovation, yet in many regards we are barely scratching the surface, content to pick up the small nuggets we stumble across while just below our feet there are seams of gold ready to be dug up, if only we'd truly commit to the work necessary to innovate regularly and consistently.  Whether we look at the Federal Government, where agencies like NASA used to regularly turn out new science and discoveries, or universities, where new science and creativity is increasingly stymied, or corporations, which have the bandwidth and the power to do far more innovation yet shy away at the investment, every constituent could easily do more, and with only a little investment and commitment unlock so much more value.  Are we content with this level of innovation?  Are we as consumers, as taxpayers, as participants in the educational systems, OK with this half-hearted commitment, resulting in mere trickles of innovation when there's an entire aquifer of ideas and innovation under our feet?
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posted by Jeffrey Phillips at 6:02 AM


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