Monday, November 19, 2018

The End of the Beginning, for innovation

It's a sign of maturity and experience to be able to determine just where you are in a journey, and I think the time has come to put some stakes in the ground about just exactly where we all are in regards to our innovation journeys.  While some companies have made tremendous strides, becoming much more innovative than their peers, the real truth is that most corporations are still at the very beginning of their innovation work, and as I've written in other places the emerging new management fads around digital transformation combined with the fact that innovation often hasn't lived up to its promises means that our innovation journeys may end before they really got started.

Because while it seems many companies have been on an innovation journey for quite some time, the honest reality is that they haven't moved very far.  There's been a significant amount of sound and fury, signifying not so much, to paraphrase a much more ancient bard.  The reality is that right now, after almost 20 years of innovation as a corporate phenomenon, most companies are closer to the end of the beginning of innovation, rather than the beginning of the end.

We're going to innovate like its 1997

You may wonder why I date the beginning of innovation as a management phenomenon to 1997.  Two significant things happened that year that in my mind gave credence to innovation as a management philosophy in corporate settings.  First, Steve Jobs returned to Apple after years in the wilderness, and second, Clayton Christensen published the Innovator's Dilemma.  Two notable thought leaders emphasizing innovation in two very different but influential spaces - Silicon Valley and the Harvard Business School.  For geological purposes I date the beginning of the corporate innovation phenomenon to 1997.

Since then Apple has moved from near bankruptcy to insane profits, and has shifted from a real innovator in experience, channels and business models to an innovation laggard currently.  Clayton Christensen went on to found Innosight, which was recently acquired by Huron, an IT and consulting firm focused on healthcare.  Both of these avatars seem to have flared up and cooled down, much like innovation over the last 20 years.

They are to some extent representative of the phenomenon that is corporate innovation. Time was that innovation was the key mantra for executive.  The word innovation showed up in public pronouncements and annual reports.  Innovation became a buzzword for basically anything new and different.  Over time we've managed to codify some basic syntax and taxonomy for innovation, but it still remains a highly fragmented, diverse industry with solutions ranging from design innovation to "open" innovation to crowdsourcing and the latest twist:  digital innovation, I suppose combining digital transformation and innovation.

Like Sisyphus we persist

But like Sisyphus no matter how much energy goes into innovation we still seem to end up far too often at the same place, with the same result.  For innovation the rock represents the work we do and the hill represents real innovation outcomes.  Too many innovators push the innovation rock through uncompromising cultures, with too little resource and too little buy-in, obstructed by the importance of day to day operations and near term profitability.  

Thus there's a lot of energy and motion involved in corporate innovation, but not nearly enough outcomes, and other concepts or ideas will start attracting more management attention as innovation doesn't provide enough return.  The emergence of digital transformation will simply make innovation more difficult in the next few years, and many "hangers on" in the innovation space will jump to digital transformation solutions, which will be easier to implement, but in the end these solutions won't recognize significant returns because they'll be used to improve efficiency.

The end of the beginning

Many corporations need to make a choice - to decide to fully commit time, resources and energy to innovation and stop asking their innovators to become Sisyphus, or to decide to focus elsewhere and acquire innovation as it emerges.  There is no real alternative to these solutions.  Customers and investors are beginning to see through what has been politely called "innovation theater". 

When Churchill declared the end of the beginning the Battle of Britain was just ending.  He wasn't promising an easy road - in fact he and others knew that many years of warfare remained.  He was taking an honest look at the state of affairs and what would happen next, and sharing that with the English population, to ready them for what was coming next.  In the same way we should take an honest look at corporate innovation and ask ourselves, after all this time, where are we?  What are the appropriate milestones and standards?  What comes next?

Now, at the end of the beginning, we innovators have choices.  There is now enough education and experienced innovators that we can create real change.  There are enough codified tools and processes to do innovation well.  What we need are executives and companies willing to fully commit to innovation - to discover needs and emerging opportunities, to reach for transformative and disruptive ideas, to invest in new capabilities that may shift customer demand and even cannibalize existing products.  We've got the critical mass, finally, after almost two decades.  It would be a shame to shift management focus to digital transformation or other management concepts just at the point where we've finally reached the end of the beginning, but that's what I fear could happen.

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posted by Jeffrey Phillips at 7:13 AM


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