Thursday, April 24, 2014

Who blocks innovation?

As an innovation consultant whose company works with a lot of large corporations, the psychic dissonance associated with innovation can be quite challenging.  By that I mean there's a lot of demand for innovation, but not a lot of passion.  A recognition that a lot of innovation is needed, but few resources and many time constraints.  A real desire to create new things, and do things differently, but little cultural permission.  We've overcome the awareness issue associated with innovation.  Everyone believes that we need to do more.  We are now staring at the commitment and inertia barriers, where it's finally time to "do" something.  And the problem is, at every level in the organization, someone wants to innovate, but an individual one level up doesn't seem bought in.

Let's take this from the bottom, shall we?

Average Employee

Your average employee is hard at work at a milling machine or processing requests for accounts payable or communicating the value of your products to customers.  Every day they see opportunities for new products, services and business models.  They recognize the opportunity for small, incremental innovation to existing products and have the capacity to imagine completely new and disruptive innovations.  Yet they go about their merry way, doing what they are "supposed" to do, because that's how they are evaluated and measured, and that's what their managers expect them to do and hold them accountable to do.  While there are lots of ideas in these teams, the individuals themselves feel obligated to keep doing what I call "business as usual" because if they don't, we won't achieve the quarter. 

These employees feel that their ideas and insights are valuable, but can't or won't ask for permission to pursue them.  They believe that their management will reject new ideas and ask them to recommit to the business as usual processes and existing products.  If you ask these people why there isn't more innovation, the answer they'll give is:  no time and no management interest.  My "manager" won't let me innovate. 

Average Middle Manager

Your average middle manager has a thankless job, stuck between the executives who make promises to Wall Street and then expect the managers and employees to make the numbers happen.  Middle managers are experts at making more from less, and they are the driving force behind "business as usual".  For more on this read my highly acclaimed book Relentless Innovation

Middle managers know they are on a treadmill, and the treadmill is running out of tread.  Products are getting old in the tooth, and fewer and fewer products are replacing those tired products.  Increasingly, they achieve their numbers by cost cutting or pulling in sales from future quarters. 

When asked why there isn't more innovation, these managers will answer:  no room for risk, no deviance from the quarter, no available headcount.  They believe they are risk and resource constrained, and that while executives expound innovation, it's all flavor of the day stuff, here today, gone tomorrow for the benefit of the market.  My executive won't allow me to innovate.

Average Executive

Your average executive, circa 2014, came to his or her role through efficiency and cost cutting.  They cut their teeth on outsourcing and right sizing, and while they never really understood Lean and Six Sigma, those solutions freed up cash flow, so the executives embraced them.  These executives aren't stupid, however.  They see and hear a lot about what other leading innovators are doing, and see the premiums that "innovators" command in the marketplace.  They want new products that drive differentiation and growth.  They want this desperately, but they also don't want to disrupt the organization or miss a quarter. So they ask for innovation, hoping someone below will rise to the challenge, while counting on making the quarter in a tightly resource constrained organization.

If you ask these executives why there isn't more innovation, they'll respond:  lack of skills and resources.  They believe the opportunities exist, and that properly led they have the people who can generate ideas and create products and services. They don't believe their teams have the skills necessary, and also recognize resource constraints and the risk involved.  They believe that their shareholders won't allow them to innovate, because it puts short-term profitability at risk.

Average Shareholder

I put shareholders at the top, because, after all, we shareholders have great sway in what businesses do.  Shareholders want to invest in firms that generate profits, and have long term growth potential, which should cause stock prices to rise.  We don't want to bet on dinosaurs or firms that can't grow and can't command increasing margins.  We are also consumers and want top notch products and new, compelling offerings.  And, we are fickle.  We can invest in any market, and buy products from any supplier who meets our needs.

Do we demand profits or innovation?  We demand both.  As consumers we want the best new products.  As investors we want profitability and growth.  Interestingly, doing the former well will often drive the latter. 

Who stands in the way of innovation?

Ultimately, there's really no one standing in the way of innovation.  Consumers and shareholders want it, and are often willing to give firms the benefit of the doubt if they are really investing in innovation.  Executives want innovation but must be convinced that their organizations can deliver, build skills and create a successful innovation capacity.  Middle managers want to innovate because they are fed up with the drudgery and being stuck between intemperate demands for innovation from on high that arrive with no resources, and requests to innovate from employees but no availability to introduce more risk or uncertainty.  Employees at the ground floor want to innovate because they witness customer needs that go unfulfilled. 

When we really look closely at "who" blocks innovation, we catch a glimpse of an imagined figure at the corner of our eye, but when we really confront who blocks innovation we see that the figure we imagined is actually made up of all of us, who don't have quite the passion or commitment to take the risk.  Everyone is responsible for blocking innovation, and no one is responsible, and there lies the problem.  Can you image anyone saying that they "don't want" innovation?  That doesn't make much sense. 

Of course this recalls the old story:

There was an important job to be done and Everybody was sure Somebody would do it. 
Anybody could have done it but Nobody did it.
Somebody got angry with that because it was Everybody’s job.
Everybody thought Anybody could do it but Nobody realized that Everybody wouldn’t do it. 
It ended that Everybody blamed Somebody when Nobody did what Anybody could have done.
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posted by Jeffrey Phillips at 6:08 AM


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