Ensuring your innovation initiative does not become extinct
The drive for a more innovative organization, or for innovation to become central to a company's strategy, is not new. In fact it is now almost assumed that all businesses need to have an innovation capability at its core but many struggle to make the transition and their innovation initiatives die. There are many challenges that an organization faces when it makes the transformation to becoming more innovative and while I have spent most of my research on the people side of innovation along with the Penn State Innovation Leadership Lab, I also understand it is a multi-faceted issue.
I my recent work with the Tepper Business School at Carnegie Mellon, I have looked into how companies structure their innovation, and there is very little research out there to guide them. It is interesting that a McKinsey survey from a few years ago focuses on innovation structures and found that many organizations use multiple innovation models, however their survey suggests regardless of structure innovation faces the same challenges. These included:
Alignment with strategy
Long term financial pressures vs short term business priorities
To understand how companies fail to overcome these challenges we need to look at how companies start this transformation. In general there has been some change in their environment that pushes them to focus on growth and then identify innovation as the key to that growth. In my experience here is how many organization's journey looks like.
This journey is thought to be linear and is driven by what leaders feel are tangible outcomes first (structure and processes) and then "soft" areas like people and culture are pushed to the back. Eventually the organizations innovation efforts fail, either because the people do not have the skills or because the culture is not supportive, and the enthusiasm drops which means that change becomes less likely. Finally the senior leaders come out with a new initiative on innovation and they start again.
Innovation is such a cross-functional challenge that you need to consider your culture up front in the process. Innovation is hard not only because coming up with the right idea is tough, but because large organizations are not designed to accept something that is new and different. Almost all of their processes are around efficiency, control and linear processes. Innovation is really none of those so you find that leaders within the organization that are not intimate with the innovation projects are resistant to the new ideas.
To get more people to say yes you need to start not only with your strategy, but also with your culture. Assessing where you are and how open your organization is to innovative ideas, how easily different areas will accept things out of the norm as well as the risk tolerance is critical. This then becomes an important input on how the innovation organization is structured. Best practices and bench marking are important as part of the process but you cannot just copy what another organization does without truly understanding where your culture is, who will be advocates, who are enablers and who will be challenges.
Beyond which functions should be involved there is the classic challenge of how integrated into your current business should your innovation initiatives be. There is a continuum that is based on understanding the link between your strategy and culture.
I have seen many companies have strategic goals of driving top line growth with breakthrough innovation and develop an innovation team outside of the business. They develop great ideas but none of the ideas are accepted by the current business because the culture does not fit that model. If you want breakthrough ideas, but your culture is not open to ideas and risk then you need to move to the left of the continuum until you can find a spot where you can be effective.
So how can you identify the best model for your organization to meet your strategic goals? It really starts with understanding your strategy and then using your culture to develop the structure that can allow you to maximize impact and meet those goals.
The model suggested here will create true sustainable innovation. It is not linear, it is iterative. It takes into account not only your current culture, but also where you want your culture to go and finally it puts your people at the center of your organization's innovation success.
Organizations that think honestly about the challenges that their innovation initiative face already understand that they need to take their culture into account. However many senior leaders believe that because all are on board in the executive meeting, the organization is on board. Innovation is a cross-functional, integrated challenge and therefore taking into account the culture of each part of the organization that is involved has to be the starting point for a successful transformation.