Wednesday, April 29, 2015

Bolt-on or Built-in Innovation

I'm led to post today by an article from Gary Hamel and Nancy Tennant in the Harvard Business Review.  In it, Gary and Nancy provide a list of actions for innovation success.  When I discovered this list, I rolled my eyes, because there is always another consultant providing another list of things to do in order to succeed at innovation.  And those lists are always self-serving lists of tools that may support an innovation activity, but will not build an innovation competency.  Anyone, anywhere, can do innovation once, and may even succeed at it.  As we say in the south, even a stopped clock is right twice a day.  What far far too many corporations have failed to understand is that they don't need innovation once.  They need innovation constantly, continuously, because the pace of change and shifting competition and consumer expectations demands more frequent innovation.

That's why I initially rolled my eyes at another list of five requirements for innovation.  But Hamel and Tennant do something you rarely find in these articles. They name check all of the tools and activities that many firms have completed.  Idea database in place?  Check.  Ability to mine customers for insights?  Check (although I find this one doubtful). Awards and recognition for successful innovators? Check.  In other words it seems that many corporations have checked the boxes of all the innovation tools and methods that should lead to innovation success.  Except they failed to realize that these need to be applied constantly, and in a holistic sense.  Just as a carpenter has a range of tools in his toolbox and uses each according to the need presented, we innovators must have all of these tools available to us, and use them appropriately and consistently. 

If you decide that the Harvard Article is too long, or you simply don't have the time to read it, here's the pull quote as far as I'm concerned.  OVO has led innovation projects for over ten years, and we have constantly reinforced this idea.  It's great to see it reinforced by thinkers like Hamel:

It takes a systematic approach to build a systemic capability—whether that is Amazon’s logistics prowess or the near-flawless service you receive as a guest at a Four Seasons hotel. So it is with innovation. Skills, tools, met­rics, processes, platforms, incentives, roles, and values all have to come together in one supercharged, all-wheel-drive, race-winning innovation machine.

In other words, innovation is a system, and must be deployed as a system, interlinked, fully capable, and constantly engaged.  These tools and methods and processes (and people) must work together, and work on a continuous basis, in order to success.  Earlier in the piece Hamel and Tennant use the analogy of a well-tuned engine disconnected from its transmission.  Again this reinforces the idea of an interconnected system, operating at full capacity.  So the key question becomes, what does it take to get there?

Hamel and Tennant provide 5 requirements, which I'll list below:

  1. Well-trained people who think like innovators. They conflate a couple of ideas in this requirement.  First is a cultural phenomenon that people must overcome the business as usual culture and think about innovation and change, rather than efficiency and stability.  Also embedded in this idea is the concept that people must be trained on innovation tools and processes.
  2. A definition of innovation.  One of my favorites.  What is innovation for your company?  What does it entail?  Is it a product, a service, a business model or something else, or all of the above?  What is the desired scope?  Incremental change or disruptive change?  Without these shared definitions, people will define their own scope and outcomes, and will usually revert to conservative definitions.
  3. Metrics.  Here I disagree somewhat with Hamel and Tennant.  They argue that many companies don't measure innovation.  I think the real problem is they measure the wrong things.  They use traditional measurements like ROI to decide whether or not the innovation will succeed, rather than understanding that innovation may require new or different measures and metrics.  I've rarely found too little measurement, but often found too much of the wrong measurements.
  4. Engaged leaders.  I wish they had placed this one first.  You will find that you cannot innovate in a large corporation without involved, engaged leaders.  If the leaders aren't passionate about innovation and willing to take risks, then no one else will be.  Leaders set the tone, allow for mistakes and experiments, provide direction and most importantly free up resources.  To me this is the first requirement.
  5. Innovation Friendly processes.  Again the authors conflate several ideas here.  They speak directly to issues of planning and budgeting.  Most annual cycle planning is inadequate for innovation, and most budgeting processes rarely consider innovation, so these may need to change.  The authors don't dwell quite as much on defining innovation processes, which I think is equally important.  Until we can define a consistent, end to end process that people can follow, innovation is haphazard and won't be as successful as it can be.
The authors make another point that is vital - the difference between innovation as a "bolt-on" to existing business as usual, or "built-in" to the corporate culture and way of doing business.  We at OVO have talked for years about the fallacy of a "bolt-on" innovation capability.  This is a fallacy because the corporation seeks to sustain business as usual and bolt-on innovation around the edges.  Since there is no slack in the system and no time or attention paid to the bolt-on process, it never gets done.  Unless and until innovation is core to the way you work, what I called in my book innovation business as usual, you'll continue to find your innovation efforts less than satisfying.

Innovation must become a core part of your operations, not an experiment on the margins, but core to the way you do business.  This means it must start from the top, influence how you think and the skills you acquire and be supported by (and not blocked by) corporate processes, timetables and resource allocations.  Right now in many corporations some of the tools or methods exist, but they aren't bound together, they don't exist as a holistic process or capability and too many existing processes, allocations and structures create barriers rather than enablers for innovation.  Time is ticking past - change is inevitable and ever accelerating.  Hamel and Tennant have the right message.  Are you listening and implementing?

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posted by Jeffrey Phillips at 6:10 AM


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