Monday, October 26, 2015

Innovation, the knowns and unknowns

I'm sure the formula existed long before Donald Rumsfeld pronounced it, but every business faces knowns and unknowns.  We face the things we know, or think we know, about our business, the environment, the economy and customers.  Worst, we face things we don't know, unknowns about the future, consumer demand, new competitors and so forth.  What executives need to understand is just how difficult these known and unknown "unknowns" are when we talk about innovation.

Innovation - A theme, a mantra or a capability

For example, I think it's important to understand how individual employees interpret what they hear when an executive talks about innovation.  I think most employees pay attention to they things they know and are comfortable with, and take a "wait and see" approach about things that are unknown or unfamiliar.  Thus, when an executive talks about innovation, for many it is an unknown, and the first judgement that many must make is whether or not it is simply a buzzword that is a throw-away phrase, not meant to be taken seriously, or the demands for innovation to become integral to what people do.  Unless and until an executive says innovation will be integral, it will be ignored, because it is an unknown.

Then, no matter how many times an executive may have talked about innovation, he or she actually demands that staff engage in an innovation activity, all heck breaks loose.  Executives are inevitably surprised by this, but we at OVO usually aren't.  That's because the executive has broken an implicit agreement - you pretend to expect innovation and we'll pretend to work on it.  As noted above, as long as executives talk about innovation but don't measure the outcomes or demand time and resources, people are completely comfortable letting the executive talk about innovation.  But, when resources are overtaxed and all the efficiency gains have been realized, when people realize that the executives are serious this time about an actual innovation activity, well, the excrement hits the rotary oscillator.  Because the first question that their teams will ask is: OK, what's the priority? And second, what initiatives I'm currently working on get demoted?  Management, if its about anything, is about three important and interlocking themes:
  • Setting clear objectives
  • Prioritizing activities
  • Providing appropriate resources
When executives move from simply talking about innovation to actually expecting it, they violate the first theme.  If for years your management has been talking about innovation but not implementing it, then it has established a clear objective:  innovation is a talking point, nothing more.  Therefore, the second and third themes are obvious:  no need to prioritize activities to include innovation and no need for more or different resources.  But when executives move from simply talking about innovation to actually expecting results, now the last two themes emerge.  Questions will inevitably arise about prioritization of other initiatives and the availability of resources.  Executives who demand innovation without thinking through these last two themes are simply kidding themselves and setting up a potential firefight within their own organizations.

Knowns and Unknowns

Why a firefight?  Because if we ask employees to do more with less, or improve efficiency, they understand what that means.  This request builds on a "known" - doing what you are already doing but doing it with less resources or with improved outcomes.  We simply exercise our "knowns" more effectively.  But when an executive or manager asks for innovation, we introduce not one but several unknowns:
  • An unknown about the process - "how" do we innovate
  • An unknown about the scope - "to what degree" do we innovate
  • An unknown about skill - "with what skills or knowledge" do we innovate
  • An unknown about time - "how long" do we innovate
  • An unknown about risk - "what discoveries or exploration or failure is permitted"
  • An unknown about the outcome - "what's an acceptable deliverable"

Talk about unknown unknowns!  Without all of this information, clearly and concisely communicated in advance and constantly reinforced, good people who are experts at conducting efficient existing processes are reduced to a circular firing squad, squabbling about potential goals, scope and intent.  Strangely, few are ever curious enough to simply ask the executive these questions; instead the team either debates them ad nauseam until the executive cancels the activity or makes their own, typically cramped interpretations that lead to delivery of look-alike results.

The first, most important innovation activity

The first, most important innovation activity that any organization can conduct is to get a clear understanding of the magnitude, scope and resource commitments for an innovation activity and the anticipated outcome and impact of the concepts.  While this seems simple in principle it almost never is, and without this communication and clarity teams can rarely do good innovation work.

Without this clarity, the innovation team faces far too many unknowns.  And when they face unknowns they resolve them in one of three ways:  choosing not to resolve them at all, waiting for someone else to resolve them and choosing to resolve them themselves.  Innovation teams will always choose certain over uncertainty, knowns over unknowns.  This means that eventually all innovation activity, in the absence of clear goals and strategy, will look exactly like an existing process, and will result in the development of products and services that closely resemble existing products and services, because these are "knowns". 

Executives and managers who want more innovation will spend time with their innovation teams, constantly quizzing them about the unknowns, and doing their best to remove or eliminate the unknowns, or at least providing guidance on how to resolve an unknown.  Never leave a team to resolve an unknown by itself, because it will simply resort to an existing "known" and you've lost a significant innovation opportunity and reinforced an existing process or tool.
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posted by Jeffrey Phillips at 12:05 PM


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