Energize Innovation

Innovation is the foundation of value for any company. Sometimes that's visible in products or services. But it could also be in processes, lead generation methods, employee development, manufacturing controls, supply chain management, outsourcing synergies, and/or purchasing options.

Very few companies are fortunate enough to be led by a "visionary" that attracts and inspires a culture of innovation throughout. Leaders in most companies have to work much harder to encourage and allow for innovation to occur.

So why do most companies struggle to foster innovation post the start-up phase? I am continuously reminded of a quote often attributed to Albert Schweitzer “The tragedy of a man's life is what dies inside of him while he lives.” The same can be said of companies.

Without the right management strategies, the innovation that initially sparked the company's founding eventually dies. If not remedied, the death of the company inevitably follows (even if slowly).

As companies grow and adapt to changing environments, they inadvertently establish blockers to innovation. Even well-run companies are not immune from that challenge. To avoid that, it helps to understand how/where they pop up. Below, I'm sharing my insights from the successes and failures I've observed over the years.

Managerial bureaucracy, even when focused on improving collaboration, is one of the biggest roadblocks to innovation.

In leading multiple product development teams at a consulting firm, I found that innovative products can be developed very quickly when reporting structures don't interfere. My team was empowered to make decisions to continually move the project forward. We only reported to a very small set of contacts at the client corporation. The result was quickly completed projects at a low cost.

A similar dynamic can often be found in small startups. But as companies grow or right-size themselves, corporate structure is re-designed to improve productivity or reduce costs. Employees/teams strive to meet new, annual departmental goals. As a result, they become less connected to other departments and the company’s overall growth and health. Companies often establish formal cross-functional teams to address that and help empower innovation. But these “Task Forces” or “Tiger Teams” create a different issue. They add a layer of bureaucracy that can actually stymie innovation.

I first observed the impact of corporate growth when working as an engineer for Bose in the mid-1990s. By all measurements, Bose was an innovation leader in its industry. I enjoyed working with the forward-thinking senior leaders. However, I started to observe that as more employees joined my growing department, it became increasingly difficult to accomplish anything.?

The new hires were intended to speed up product development. Instead, project schedules were elongated. Even as the senior leaders pushed for speed and innovation, middle managers slowed the innovation wheel to avoid failure.?

Following advice from Peter Drucker’s “The Effective Executive”, I logged and analyzed how I was using my time. At the end of the month, I determined that I was only averaging of 3 ? hour of engineering time each day.? Most of my days were occupied writing reports for the meetings that had exploded in quantity as more middle managers were hired.

The bureaucratic "time sink" is just one of the adverse impacts of corporate growth. The other is an increased focus on minimizing/eliminating failure.

As a startup matures, new workers are hired who are more committed to personal ambitions than the company's success. Maverick/risk-taking employees get squeezed out by risk-averse managers.

Innovation requires pushing the boundary of what is possible. Failures are a natural part of the process.? They are critical learning opportunities. As long as failures can occur quickly and are leveraged to continue innovation discovery, I encourage taking risks. The knowledge gained fuels the next iteration.

My approach creates a difficult leadership issue for Research & Development executives. That's why I advocate for separating development from research.

Throughout my career, I have observed exceptional executives struggle to manage the two worlds of Research and Development projects. Successful development projects require meeting short-term business targets. They should evolve products on tight schedules. Research projects should be delivery-focused. There must be checkpoints, but the key drivers should be discovery and revolutionary thinking.

Establishing the right priorities, environment, and reporting structures is critical to fostering innovation.

From my experience and research over the past 30 years, I identified the following strategies to maximize innovation success throughout the organization.

1. Communicate a vision for the project with clear measurable objectives based on the value to the end customer.

2. Assemble the smallest number of people that are critical to the project with an innovation mindset.

3.?Delegate complete control of the effort to the team that directly reports to one C-Level executive.

4.?Keep progress status and reports to a minimum, but they need to include some financial tracking.

5.?Emphasize credit and recognition of employee efforts to foster the desired culture.

Fostering an innovative environment in a growing company is challenging but possible.

I hope my advice above is helpful in your efforts. As I've indicated in this article, one important factor is hiring the right employees. You can read my thoughts on that “Hiring for long-term retention” https://www.dhirubhai.net/pulse/hiring-long-term-retention-john-joao-melo/?trackingId=%2Fv%2Fv9lD1CIak748M6CZRfQ%3D%3D