Tuesday, November 17, 2015

To accelerate innovation, focus on culture

There's an old joke about perspective and laziness I love and have used before on this blog, because it illustrates many of the challenges (and opportunities) of corporate innovation.  The joke goes that a young man steps out of a bar, and spies another person, obviously drunk, peering intently at the sidewalk under a street lamp.  Curious, the guy just leaving the bar goes over to the drunk and asks "what are you doing?"  The drunk answers "I'm looking for my keys".  The first guy decides to help and scans the area around the light post, but can't find any keys.  "Are you sure you lost them here?" he says to the drunk. "No" says the drunk, pointing at a dark alley.  "I lost them over there I think".  The sober guy, frustrated, says "well, why are you looking over here?".  The drunk replies, "because the light is better".  This analogy aligns so well to what corporate America does when it comes to a focus on innovation - intent discovery on things that don't matter, while purposefully ignoring the factors that must change to make innovation successful.

Intent focus on the unimportant

In an effort to be seen doing something, when innovation is a priority most organizations will respond with alacrity, gathering teams to conduct idea generation.  There will be hack-a-thons, crowdsourcing, open innovation, encouragement of "wild ideas", pizza parties and a host of other short term activities leading to a small subset of interesting ideas.  These ideas will have been formed by people with little innovation experience, formed in a setting with information about customer needs, competitive actions or market trends, and managed by people whose overriding goal is to get to a solution, any solution, as quickly and cleanly as possible, so that everyone can go back to doing what they ought to be doing: efficient execution of day to day operations.

There is intent focus on getting to an answer as quickly as possible, no matter how incremental or absurd the answer is, because the focus is on completing an innovation activity and getting back to what you regularly do.  Generating and implementing interesting, disruptive ideas is not seen as especially important, because few people believe the ideas will see the light of day after the idea generation events.  Therefore, everyone focuses like crazy on the idea generation, safe in the knowledge that they won't be called on to actually attempt to implement them.  The focus is on successful completion of the idea generation activity, not on actual implementation of new ideas.

Thus corporations emphasize the unimportant and rush away just as the real work begins.

Ignoring the difficult but important

Like the drunk at the light post, focusing on the well-lit spot at the curb rather than where the keys actually are, most corporations are too busy to pay attention to what really matters, and what blocks innovation.  There's good reason for that willful blindness, because what holds back innovation is the overriding focus on execution and efficiency baked into corporate culture.  In order to get more engagement with innovation and to do innovation more effectively, you've got to infect the culture with new ways of thinking, new perspectives, new tools and new processes and reward systems.  Otherwise innovation is a slap-dash bolt-on activity that cannot, will not, result in anything valuable.

But this truism indicates that to do innovation well, and especially to do innovation consistently over time, we have to focus on the core components of the business and change or adapt them to a new operating reality.  Most innovation teams are content to focus on idea generation, prototyping or other short term, simple activities, all the while realizing that the corporate culture and ways of investing and decision making aren't going to approve or validate their ideas.  Until and unless we focus on the culture first and foremost, no firm or team will be successful at innovating.  In other words, we've got to go look for the keys in the dark alley, no matter how much harder or more challenging it will be to do so, because that's where the real value is.  In plain language, until corporations address their overriding focus on efficiency and the inertia and risk aversion built into corporate culture, it will be exceptionally difficult to innovate.

So why not start working on the biggest barrier to innovation - corporate culture?  Most CEOs will admit their cultures present barriers but they also know how difficult changing a culture is and how long it will take.  Which leads to another old saw:  you can eat an elephant one bite at a time, but you have to start sometime.  We can influence corporate culture in small, consistent ways that are constantly reinforced.  Unless a culture is under dire, immediate threat of extinction, slow, consistent change is the only way to influence a culture.

Creating culture change that influences innovation

I was asked recently by the COO of a large corporation how to impact the culture so his teams could get more innovation.  And I responded by asking how his product team leaders were compensated, what they thought their jobs were and what they were expected to deliver.  If the employees believe the purpose and goal of the company is efficient execution of day to day operations, and that's how they are compensated and rewarded, then that's what they will generate.  And if they understood that their jobs require a balance between efficient execution while constantly looking for improved ways to execute and disruptive solutions to improve their customer's business, and if they were compensated for customer delight and for solving problems customers recognize and don't know they have, then  companies will innovate.  Today, in the face of monolithic cultures, people follow what the culture dictates.  For innovators, the culture follows what employees and customers need. Far too often innovators are shackled to culture, rather than the other way round.

Right now, in most organizations, the people follow the culture because it has power.  Corporate culture has history, it has stories, it on-boards new employees, it dictates how things get done.  Employees have to be crazy to work against corporate culture, so people follow a culture, long after it has outlived its shelf life.  What we need are leaders and managers who create new solutions, and force the culture to follow the needs of customers and the intent of good leaders and managers. 

 As business needs, competition and customer demands change, cultures must change and adapt with them, keeping what's good and beneficial but adjusting to new competitive realities. It's interesting that the factor we should place the most emphasis on to improve innovation is what we leave till last, if we focus on it at all, and the things we focus on first are the easiest to do but have the least impact on transitioning an idea from concept to product or service. 

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posted by Jeffrey Phillips at 6:47 AM


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