Where does innovation take place? What drives innovation? Can an environment be created that fosters innovation? If so, can the opposite also be true? Do organizations hinder innovation by how they are structured and how they are managed? Where can the heart of innovation be found in truly innovative and successful organizations? In its leaders.
Talk is Not Enough
You may remember the days when mission statements were the “new thing.” Every organization jumped on board to create one. Not only did organizations rush to create one, but they also made sure they could include all the necessary “buzz words” of the time. Then they made sure everyone in the organization could see the mission statement. It went up on the wall. It went on plaques and posters. It had to roll off the tongues of employees. I recall one employer I worked for had executives wandering the halls with five dollar bills, handing them out to employees who could flawlessly recite the mission statement on demand. It became a game amongst employees to see how many executives you could pass in the course of a day to get “a pop quiz” and earn the reward.
Sadly knowing the words to the mission statement didn’t mean that anyone really understood the mission statement or how a particular job fit into the greater scheme of making the mission “happen.” Arguably the mission statement didn’t really have anything to do with the actual day-to-day business either. But it sure sounded good and had all those buzz words in it. Oh, it was a real money maker too, for the first quarter after it was rolled out; that is, it was a moneymaker for the employees reciting it to the executives for those on-the-spot cash rewards and for the sign makers and the printers.
Innovation initiatives can be a trap for companies, just like the early days of mission statements, IF the organization isn’t cognizant of the true meaning of innovation and IF it doesn’t have a firm grasp on how innovation fits into the existing organizational structure. Integration of innovation into the existing infrastructure, processes, and mindset is necessary to make a real and meaningful difference in the behaviors and returns the organization generates. Without true integration into the organizational processes, innovation is just so much “talk” or it can be an “extra operation”: what those “other people” do or what the “research and development” or “expert group” is charged with. It won’t be part of the organization’s core, so it won’t be owned by its leadership and people at all levels. It will fall to “someone else” to make it happen. “Someone else” will need to take the lead. “Someone else” will have to come up with resources. “Someone else” will have to see that it gets priority … and so on.
Nothing is Sacred
Too many organizations believe that only the experts or a special group in the organization can or should have the responsibility for innovation. The reality is that the most innovative organizations have an open environment. These organizations believe that anyone and anything is part of the process of innovation. They look not only at the product, service, and technology being sold to the customer, but also at the internal processes, the business model, and the assumptions they operate under for opportunities to innovate. They welcome and expect challenges to the status quo from every source—internal and external—so that they are constantly reexamining and reevaluating their environment, processes, markets, customers, competitors, products, and more to find the opportunities to innovate. No territory is off limits, nothing is sacred. Anyone can and should ask questions.
The expectation for innovative organizations is that leaders ask questions and those they lead should emulate them, asking questions too: Questions up and down the ladder; questions peer to peer; questions about the market; questions about the industry; questions about the competition; questions about other industries. Questions, questions, questions: Innovative organizations are seeking answers; seeking more questions; and seeking opportunities to develop answers and solutions to previously unanswered needs, wants, and desires. Recognizing that questions are the innovation starting points, leaders enable the organization to have the structures, systems, and resources to facilitate the question and answer process, which is exploration for innovation opportunity.
Real Innovation is Integrated in the Organization
Asking questions for the sake of questions isn’t what we are talking about. Random action is wasted potential. Harnessing the energy of the organization requires the integration and focus of the efforts toward a specific area of accomplishment—a real mission to accomplish. This enables the organization to seek out both radical and incremental innovation without losing a sense of self and direction. This is the heart of innovation, where leaders guide the organization’s efforts and focus toward its future vision of the organization to expand the definition of the business into what the company knows and what it owns, making it broader and deeper in its core areas of expertise and competencies. Leaders want to clearly structure the organization so all employees know what they are working to become, and what the targets are to achieve this new state.
The transition from the entity of today to the future view requires that the organization have alignment of funding, talent, processes, metrics, compensation, incentives, and leadership. In other words, the organization must be committed to innovation at all operational levels with its people, finances, and infrastructure in order to successfully create an environment that fosters innovation, supports opportunities to innovate, recognizes and rewards innovation, and sustains the processes on a continuous basis (not a start-and-stop or spend-and-starve cycle).
Funding and Talent: The Real Commitment
The true signal to the organization at all levels of the commitment—a real commitment—to innovation is when resources (people and money) are prioritized to innovation. Putting your money where your commitment is makes the connection between the objective and the actions. Alignment of the organization, from vision, to mission, to objectives, to budgets, all the way down to individual performance objectives, is critical to achieving a culture and environment conducive to innovation. When the organization isn’t aligned to enable innovation, then other priorities and objectives, other agendas get in the way.
Remember that innovation isn’t meant to be an isolated activity limited to one group in the organization or to a “special committee.” For innovation to work, for the organization to capture the maximum impact of innovation, it must pervade the organization: product, services, technology; internally and externally focused activities and processes. Whatever, wherever, and whoever is engaged in your organization are fair game for participation in and examination by the innovation process! This means that people and budgets all are going to require a “rebalancing” to include recognition of a commitment to an innovative component to their roles. This means examining time, projects, assets, people, and competencies. This means opportunities to try new things (and to fail), to challenge existing methods, assumptions and standards (and occasionally miss the targets). All need to be captured and provisioned for in the development of budgets, forecasts, and profitability of the organization.
The real commitment to innovation is recognizing that in the near term or the short run, the organization may in fact sacrifice some profits, some returns on investment, in order to achieve greater returns in the future—because the organization is seeking to achieve innovation capable of great returns. Also, in the initial stages of creating the innovative platform for the organization, there will be a learning curve during which the organization must develop the innovative “muscle” for identifying how to determine which innovations to pursue, how to allocate resources amongst projects, and other issues of strategic importance.
Time Out for Innovation
“Frantic”: I think that would probably be an appropriate word to describe most efforts to compete today. The efforts are frantic. Everyone is scrambling to identify the next best thing, to see what everyone is talking about. What is the buzz? Who is onto “the next big thing”? The problem is, if everyone is frantically running to catch up, it means that everyone is already behind. Innovation is about getting ahead, not catching up.
To get ahead, you have to take time out. It doesn’t mean you stop competing where you are, but does mean you have to carve out time for the organization to focus on finding the “new,” the “next,” the “what no one has found.” Innovation is about being quiet and listening for the opportunity. Innovation is about allowing time for your team members to think about what is working and how it can work better: the incremental change. It is about giving them time to think about what isn’t working well (or not at all) and brainstorming possible solutions, from the possible to the improbable, and giving them time to pursue those ideas to see what works. Innovation is about evolution and revolution. You want people to see ideas and opportunities everywhere. You want them to be passionate about pursuing them. You want to harness that passion, drive innovation, hone the competitiveness, align the resources, and generate projects that can be tested, then develop products that can be ultimately commercialized. To do this takes time, time out of each person’s “frantic” activities of the day-to-day firefighting and treadmill tasks, time out to refocus on the future and possibilities. Innovation requires the ability to rebalance the organization between the necessities of today and the possibilities of tomorrow. Both are musts for the success of a sustainable and profitable organization
Innovation Equation: Today Plus Tomorrow
Innovation is the future of the organization. It takes place in the context of making things happen today and taking steps to create an organization that recognizes the direction, objectives, and requirements of performance. It also requires the organization to recognize how innovation changes the product and competitive perspective.
- Short term – today to 1 year or less: The “Products” on the shelf
- Mid term – 1 to 2 years: The “Products” in the market the “next big thing”/”the buzz”
- Long term – 2 years to “tomorrow”: The “Innovations” to be made moving the markets and competition
Today the product on the shelf is obsolete in a matter of weeks or months instead of years. Innovation is increasing the pace of everything … even product and technology innovation, and consequently product life cycles. Faster, faster goes the pace of innovation. Shorter and shorter is the competitive life of the product. To keep pace organizations must be innovative in products, packaging, business models, and every aspect of what they do. The organization that can’t keep pace will be left behind with closed doors and no customers.
Today innovation isn’t an option. It is a necessity. How an organization chooses to obtain its innovations still has some flexibility. As for tomorrow? Only the innovative organizations will know.
Copyright ©2008 Lea A. Strickland, F.O.C.U.S. Resource, Inc.
All Rights Reserved
Note: The 2 year mid-term horizon may be shorter or longer depending upon the industry and technology/product development process, but keep in mind that with innovation everything is being done faster in every industry and technology.