Friday, November 19, 2010

The Five Uncertainties of Innovation

Let's face it.  Innovation isn't hard, it isn't complicated, it isn't unattractive work.  Innovation is really difficult because it is new and fraught with uncertainties.  Since we've been trained to abhor vacuums and uncertainties, many firms shy away from innovation, and use excuses like "It's too hard" or "The pay-off is hard to predict" or a number of other arguments, which are all really about uncertainties.

I'm a great artist again today, stealing the concept of "Five Uncertainties" from Patrick Lencioni's Five Dysfunctions of a Team.  There are probably more than five uncertainties where innovation is concerned, but that sounded like a good, round number.  Today we'll examine five key uncertainties having to do with innovation, why they block innovation, and how to deal with them for innovation success.

Strategic Uncertainty

Probably the most common cause of "innovation failure" is strategic uncertainty.  This is fairly easy to recognize and occurs in one of two forms.  Either the corporate or business unit strategy and goals are vague, or the innovation team ignores clear strategy to pursue its own goals.  The first case is the most common, and the strangest to me.  Why do we pay gobs of money to senior executives who are so poor at communicating their strategic goals?  An innovation team that cannot obtain clarity about strategic goals typically spins its wheels, since all paths and all directions seem equally viable.  Without a clear strategy, there's no clear targets or goals. 

Solving this uncertainty is easy and dangerous.  First, ask the executive sponsor of the innovation effort to clarify the corporate strategies and goals.  If he or she can do that, you are in the clover.  If they can't, no worries, the team merely needs to assert what it thinks is important and ask for acceptance.  If you can't receive clarity about strategic goals top down, assert them back at the executive(s) and tell them you'll start the project on based on your sense of what's strategic in two weeks if no answer is received.  Whether you create it or the executives create it, you need a clear strategy.

"Outcome" uncertainty

What we are calling "outcome" uncertainty deals with what the team is supposed to produce.  Incremental products or disruptive services?  It's not enough to say that a team should create something innovative - the team needs to understand the acceptable range of options.  If the executives want a new physical product to sell, then say so.  Narrowing the scope actually helps the team.  Allowing the scope to remain broad and poorly defined is a recipe for disaster. 

Someone - the sponsor of the project, the potential implementer of the solution, needs to indicate what kinds of products or services should be delivered in the project, and how incremental or disruptive the solution should be.  Again, if you can't get that information from the executive team, then the innovation team must assert it.  Otherwise your result will be a jumble of incremental products which appear uninteresting or disruptive services which appear to be impractical.

Communication uncertainty

This is one of the strangest uncertainties - when an innovation team is formed and tasked, but no one bothers to communicate goals or outcomes to the rest of the organization.  Everyone not on the team is constantly sniffing around, trying to understand if the innovation team will cannibalize or disrupt their sacred cow.  Most interact with the team with high suspicion at the least and active disregard at the worst. 

Your team can't work well in isolation and won't work well in active competition with the rest of the organization.  Communicate your purpose and goals quickly and continuously.  Better to have one or two active enemies who fear your team will disrupt their activities than an entire organization suspicious of your intentions.  This one always boggles my mind - surely we receive far too much communication, but on unimportant topics, while we avoid talking about or communicating about strategic topics.

Success uncertainty
As we all know by now, innovation often means failing, and hopefully learning something new that can be used in the next product or service.  That's easy to say and very difficult to accept.  Most firms are very comfortable implementing projects and activities that have a high likelihood of success, which is why many firms do the same things over and over again with diminishing returns.  They understand how to do them and can count on at least some minimal, but almost guaranteed success.  Nobody wants the black mark of "failure" on their permanent record.

We can't guarantee success, and we can't eliminate the uncertainty that haunts an innovation project, but we can reduce the uncertainty of success by building in the processes and techniques that will make innovation more effective, and doing the research necessary to spot important trends and emerging markets.  In other words, we can increase the likelihood of success by investing in the right tools, techniques and methods, and perhaps partners, who can make innovation more successful.

Commitment uncertainty

Another one of my favorite uncertainties about innovation is commitment uncertainty.  This is the queasy look that many innovation team members get when they realize how much learning and work is required to do a good job on an innovation project, and they sheepishly admit that they have a "full time" day job, and that innovation is something they can commit about 4 hours a week towards.  They are forced to choose between a commitment to an interesting project they know is important but probably won't impact their compensation or evaluation, and the pressing needs of day to day business which is far less interesting and valuable, but how they'll be compensated and evaluated.  At this point only the true believers still have the fire in their eyes.

Your firm can eliminate commitment uncertainty by recognizing the people who are on the innovation team and ensuring they can commit the time necessary to be successful on the innovation project.  You can assure yourself of greater commitment by recruiting volunteers, who may not have the "right" titles but want to be part of something larger than their day job.  You can eliminate commitment uncertainty by building in a measure of innovation into the evaluation forms, so people need to demonstrate innovation skills and outcomes to advance.

Here are five innovation uncertainties and how to address them.  As I noted at the beginning of this article, innovation isn't really all that difficult, doesn't require tremendous expertise, and has well defined methods and processes.  While these and other reasons are given for avoiding innovation, I firmly believe that the ultimate barrier for innovation is the tremendous amount of uncertainty that swirls around the effort.
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posted by Jeffrey Phillips at 6:49 AM


Anonymous Anonymous said...

Thanks a lot for this time sharing of innovation about THE FIVE UNCERTAINTIES OF INNOVATION. This is really the best website about innovation i have ever read.
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