Innovation culture: this is not a simple and linear journey, but you can do it.

Innovation. According to the Cambridge Dictionary the definition is “(the use of) a new idea or method” (1). Many companies around the world have directed efforts to promote innovation in their business. To verify this, just access the official websites of the companies on the internet and you my dear reader can easily find an access tab called innovation. Nonetheless the first question is: Does the Innovation really being practiced through the daily routine and incorporated at the companies’ strategy? Most part of “innovation program” inside companies focus too much on ideas generation, workshops and design sprint-like events (hackathons) that die immediately after ideation, delivering frustrations for all around in the corporation (project leader, sponsor and people that make part of the event). To succeed, corporate innovation needs to be strongly aligned with the organization's strategy so that it can face the difficulties in proving results in the short and long term. This being very well designed, will allow the company's strategy to be broken down into OKRs (Objectives and Key Results) that will guarantee the breakdown of activities at all levels of the company, strengthening (or creating) the corporate innovation culture. The worst scenario for the company is that its innovation program appears much more for fear of being left behind, for fear of losing.

When we look back at the past, it is possible to see that historians usually describe three major categories of events that accelerate the course of human history: wars, revolutions and epidemics. Considering the current scenario, in which the COVID-19 pandemic is affecting the economy all around the world, and challenging the business status, the innovation becomes a key tool to the survival in both short and long-term. Ranjay Gulati, Nitin Nohria and Franz Wohlgezogen published a paper (2) in the Harvard Business Review magazine that revealed that historically in times of recession: 17% of companies disappear, 74% of companies survive and only 9% of companies come out of the crisis stronger than ever. What did those 9% do differently? The study shows that companies that have mastered the delicate balance between cutting costs to survive today and investing to grow tomorrow do well after a recession. These companies reduced costs selectively by focusing more on operational efficiency than their rivals do, as well as they invested in the future by applying resources on marketing, R&D and new assets. In other words, those companies directed efforts to promote innovation that delivery real value to the business and above all to make people's lives better. In this sense, programs of ideas and hackathons that generate results are those that direct efforts towards challenges that are relevant to the company (ensuring strategic alignment) and that are previously investigated from the point of view of the people who are part of the problem (understand the problem is a key step to succeed).

Following I would like to share with you some reliable references that has been guiding my journey through this amazing subject called innovation:

1.   IDEO (3) – Tim Brown the executive chair of IDEO has a quote that highlight the essence of Design Thinking:

“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.”.

This approach brings together what is desirable from a human point of view with what is technologically feasible and economically viable. The intersection of those three points of view is where the Design Thinking lives.

Figure 1 – The Design Thinking intersection.

Source: https://designthinking.ideo.com/

 For IDEO, design thinking is a way to solve problems through creativity. In the context of world we live nowadays - dynamic, interconnected, multifaceted, uncertain and full of human needs to be addressed – design thinking presents itself as a methodology capable of overcoming challenges and delivering solutions that are truly human-centered.

The more I study design thinking the more I understand the importance of moving in an iterative way between the 3 activities taught by Tim Brown (4): inspiration, ideation and implementation. The inspiration space is the moment when insights are collected considering all possible sources. Ideation is the space in which insights are translated into ideas. Implementation is the space in which the best ideas are developed in a concrete action plan. Recalling that iteration is important, because often ideals when understood, give rise to new insights that further enrich the highlighted ideas.

Figure 2 – The 3 spaces of Design Thinking.

Source: https://designthinking.ideo.com/

 Based on creativity and human needs, design thinking has in its backbone the rational of the diverge and converge thinking. The diverge thinking create choices and the converge thinking make choices. Being transparent with you, the greater the number of options to choose from, the greater the difficulty and complexity. However, divergent thinking is a fundamental path for innovation that has a real impact on people's lives.

Figure 3 – The diverge and converge moments.

Source: https://designthinking.ideo.com/

 2.   d.school (5) (6) – highlights the 8 core abilities that reinforce the Design Thinking performance in an innovation culture: (i) Navigate Ambiguity – is the ability to recognize and persist throughout of unknown and uncertain scenarios, developing strategies to overcome ambiguity; (ii) Learn from others (People and Contexts) – is the art of learn through empathizing and embracing diverse viewpoints while testing new ideas and observing contests; (iii) Synthesize Information – here the key point is find insight and make sense with the plenty of information collected during tests and observations; (iv) Experiment Rapidly - experimenting by both generating a flood of new concepts at low resolution (brainstorming) and testing some of those concepts with potential users will lead you to learn fast and enrich ideas that articulate with the business strategy and people needs; (v) Move Between Concrete and Abstract – this ability lead the professional understanding the purpose behind the stakeholders. Only after having this grasp it will be possible start thinking about the product or service’s features; (vi) Build and Craft Intentionally – this ability requires sensitivity to create a meaningful work according to the level of work demanded by the audience; (vii) Communicate Deliberately - communication happens in a plenty of contexts, so it is important have skills to capture and relate stories, concepts, reflections and ideas properly to stakeholders and C-level. As well as to communicate learnings to the appropriate audiences; (viii) Design Your Design Work - this ability develops with practice, it requires using intuition, adapting tools to the contexts by recognizing a project as a problem to be solved and that will require the right people, tools and techniques to meet the challenge at hand.

3.   weme (7) (8) (9) (10) (11) (12) (13) (14) (15) – innovation and design studio that has the objective that together with customers make change uncomplicated to drive people and organizations towards innovation. The company presents, in its e-book (8) entitled "Seja + ágil" ("Be + Agile in English" - free translation), a clear context for one of the hot topics covered in modern business courses (at least it should be!): Liquid Organization – the contemporary companies should seek faster responses (like ever before) to a world that is evolving at high speed, developing an adaptive capacity allowing it to modify structures and roles flexibly to exist in a state of a permanent change. To succeed is important guarantee that all team members are aligned to the company strategy. Another important feature is that the company culture should stimulate the collaboration (co-creation) between employees since the individual impact in the team will define the real impact in the team deliveries. Speed is better than perfection, in other words, spending a lot of time perfecting a delivery can cause the team to lose timing, while the minimally viable that is delivered and tested fast can be iterated quickly and bring a variety of learnings. In order to make rapid testing and responses possible, excessive centralizations and approvals must be left out. Agile teams demand trust and delegation from the leadership, following the concept that empowering is sharing responsibility with the team. Learning fast is an important feature to contemporary companies. It is still relevant have in your team people that are considered specialists in such themes and subjects, but nowadays is also important have people in your team that have ability to learn fast and with open mindset to assimilate new practices, new approaches, new paths. Another relevant concept that weme always reinforce in its publications refer about human-centered mindset that is the path to develop and delivery real value to customers based on the deep understanding of their needs. To foster innovation is extremely important care about the new ideas. Although carrying out innovation ideas programs is a great first step towards a more innovative organization, they often face difficulties in proving results in the short and long term. How to get around? Carolina Nucci from weme lists the main failure modes of ideas programs and how we can reverse this logic to bring real innovation to the practice of large organizations (12): (i) start with the F.O.M.O (fear of missing out) and not by the business strategy – the consequence of this are projects that gain a lot of space in both internal and external marketing but fail to produce concrete results for the company. To avoid this mismatch, it is important to ensure that any innovation initiative is always in line with the short and long-term corporate strategy. In this way, there will be strong stakeholders who will support the initiatives and the results produced will be strategic for the positioning of the company in the market; (ii) do not considering the characteristics of the internal culture before just replicating good external practices - not always the recipe that succeed in one company also works in another. Culture changes, challenges change - everything changes. This is the scenario in which the design thinking approach is fundamental to project a human-centered innovation program in order to understand the company reality, challenges, opportunities and motivations through the eyes of involved people and connecting it to the company strategy; (iii) generate ideas without understanding of the problems - programs that leave the generation of ideas open without having the clarity and alignment about what is the problem that the ideas should propose to solve have as a consequence a process that is more random than directed, becoming unproductive. To promote an innovation program assertive, we must start defining the problem. Only after it well done, the process of generating ideas should take place. Understanding the problem, you can find opportunities aligned to the business strategy through the viewpoint of people involved with the problem. This will create ideas of real impact and innovative; (iv) the culture of doing it right at the first time - often unexpected ideas and wrong or unconventional answers are often a reason for reprimand in most part of corporate culture. The more controlled, hierarchical and rigid the environment, the greater the incidence of voices such as "it will never change", "but it was always like this", "something like this would never go forward" taking place the critical analysis in the mind of all involved in the creative process, blocking the "leapfrog" in the direction of innovative solutions. to overcome this adversity, it is necessary that all levels of leadership are made aware and engaged in changing the command-and-control posture with their teams, starting to set an example by taking risks with new ideas and encouraging others to do the same through tolerance error and encouraging rapid experimentation; (v) do not having an established governance to hold ideas management - organizing and prioritizing the plenty of ideas generated through creative events is as important as the process of creating them. Ideas can be managed through classifications such as: degree of complexity for implementation, potential impact and degree of strategic alignment with the business; (vi) be innovative in generating ideas but remain traditional in execution - this is undoubtedly the most painful for organizations, as well as frequent, as it is belatedly identified and, therefore, it is the one that most generates waste of resources and undermines the purpose of the initiative. This is undoubtedly the most painful for organizations, as well as frequent, as it is belatedly identified and, therefore, it is the one that most generates waste of resources and undermines the purpose of the initiative. Imagine that the previous 5 error mode have been overtaken, so you have a powerful engine understanding problems, generating innovative ideas to solve them and a governance that prioritize the ideas to be tested. This is only the beginning of the whole process of innovation. All the efforts directed until here goes to waste when the execution adopt the fashion old practice of doing business, usually prioritizing short-term demands by risk aversion. A best practice to be adopted is the implementation of an innovation laboratory, which focuses on exploring, prototyping and testing the concept of each idea in the simplest possible way in quick test and learning cycles to see if it is worth the investment. Instead of already compromising the organization's focus and resources with long projects of complete development with few prioritized ideas. The biggest gain is in being able to anticipate potential project errors and to pass on ideas that in fact have the greatest potential for success.

Figure 4 – Experimentation laboratory for validating ideas and hypotheses.

Source: weme (12) – adapted translating to Portuguese.

 An important point for this model to succeed is having a dedicated team outside the core structure. The protection of this structure is not only justified by the risk reduction in the development of innovative ideas, but also guarantees a continuous path to give vent to these ideas - so that they do not get lost in face of other short-term priorities inherent to teams more connected core activities.

 In this scenario Design Thinking methodology presents as a great concept to be adopted in the process of promote an agile innovation culture. Due to its human-centered nature Design Think aims to solve problems through a collaborative route by proposing fast, inexpensive testing solutions that generate constant iterations.

Figure 5 – Stages of Design Thinking.

Source: d.school (6)

 The game starts by Empathize: deeply understand the problem and all its implications. Once you understand all the complexity of the problem, the Definition takes place. Using the data previously gathered during empathize, now it is time to define the problem you will focus on based in the deep understanding of the user's pains and needs. The next stage is the Ideate. In this moment, the plenty of ideas will be produced considering the problem defined before. It is important to highlight that there is no bad or wrong idea, everything here must be welcomed and shared. It is time to get the best out of the combination of different perspectives looking at the same problem (the powerful of diversity). However, it is important to note that not everything that arises from the brainstorm of ideation will be carried forward. So, let creativity and collaboration run wild. Now it is time to ideas come true by prototyping. In this stage the team should be able to interact and experience with the prototype. In early stages of prototyping is recommended to keep prototypes inexpensive and low resolution in order to learn fast and explore alternatives. In the last stage it is the moment for testing, in other words, it is the chance to gather feedback, refine the solution and learn more through the customer lens. Think on it as an iterative process. Follow the d.school’s recommendation:

“prototype as if you know you are right, but test as if you know you are wrong”.

4.   HBR – Harvard Business School (16) is one of my long-term partners since I have decided to move my carrier from technological chemistry researcher to innovation keeper. There I could access a lot of papers related to innovation, business strategy, people management and others valuable subjects for those who want to develop their careers in the context of innovation. One of my favorites is Managing Your Innovation Portfolio by Bansi Nagji and Geoff Tuff (17) in which the authors introduced the Innovation Ambition Matrix (figure 6) representing the three levels of ambition should be carefully balanced in the company’s innovation portfolio. The matrix is composed by “How to win” in the horizontal axis and “Where to play” in the vertical axis. Each axis is scaled in three levels that differentiate according to the complexity and risk degree. By crossing both nature of innovation strategies (How to win x Where to Play) is possible to classify the company’s innovation portfolio (project by project) and have a big picture respect the balance between: Core, Adjacent and Transformational. Core projects aims to optimize existing products for existing customers. Adjacent aims to expand from existing business into “new to the company” business. Transformational aims to develop breakthroughs and investing things for markets that do not yet exist. Look that the complexity and risk degrees increase moving from Core-Adjacent-Transformational. There is no magic number (recipe) to balance the innovation portfolio. It will depend on the company ambition and strategy.

Figure 6 – Different ambitions reflect different efforts.

Source: Harvard Business Review (17)

 I have had the opportunity to apply this tool since I become an innovation keeper working in corporative PMO team. It really gave me powerful data to present and discuss with the company boarder during ideas and projects prioritization in portfolio meetings.

The natural tendency of most companies is to restrict problems and choices in order of the obvious and the incremental. Although this trend is more effective in the short term, in the long run it makes the organization more conservative, inflexible and vulnerable to the innovative ideas of its competitors. To promote innovation, it is necessary to allow the necessary time, space and budget that the creative team needs to make mistakes. That is right, mistakes. Because it is through the early mistakes’ characteristic of the culture of experimentation and risk tolerance that significant learnings in the innovation process are realized.

Greg Satell, author of the book Mapping Innovation: A Playbook for Navigating a Disruptive Age, published a paper in HBR (18) The 4 Types of Innovation and the Problems They Solve that presents a powerful view point that “innovation is, at is core, about solving problems”, so as we have a plenty of problems to be solved in our global community, there are different ways to innovate: (i) Sustaining Innovation - this is the most widespread type of innovation in the corporate world, because usually companies tend to seek incremental improvements to get better at what they are already doing; (ii) Breakthrough Innovation - in this case we have a well defined problem to be solved, but the company do not have the domain well defined. In cases like these, we need to explore unconventional skill domains in order to promote radical innovations that overtake the complexity and the unknow behind the problem; (iii) Disruptive Innovation - this kind of innovation take place in a scenario when the company have a domain well defined about a subject and the environment changes completely. In this case disruptive innovation will delivery results innovating the company’s business model; (iv) Basic Research – this kind of innovation covers initiatives linked to not well-defined problems and not well-defined domain. It is particularly important to play partnerships with research institutes and universities to better allocate efforts in initial TRL (Technology Readiness Levels) developments.

Gina O’Connor published a paper in HBR (19) Real Innovation Requires More Than an R&D Budget in which she presents a view point that innovation is much bigger than traditional R&D, involving three distinct capabilities: Discovery, Incubation and Acceleration (DIA). Discovery comprises beyond the R&D and Business Unit can provide, refining technical aspects, mapping opportunities landscape and business applications. In the Incubation stage, tests are expanded and most promising opportunities stablishing the business model strategy. The Accelerate stage is a transition moment for those initiatives that starts to take off once they have achieved the scale needed to survive under normal operations and metrics.

Gary P. Pisano from Harvard Business School published a paper entitled You Need an Innovation Strategy (20) where he points out that the reasons to build and maintain the capacity to innovate in corporate organizations goes far beyond failure to execute, commonly cited as the main reason for failures in corporate innovation programs. The problem to him is rooted in the lack of an innovation strategy. Through his more than two decades studying and consulting for companies in a broad range of industries, Pisano conclude that firms rarely articulate strategies to align their innovation efforts with their business strategies. Without an innovation strategy, different parts of an organization can easily wind up pursuing conflicting priorities—even if there is a clear business strategy. The sales team always have in the table the pressing needs of biggest customers. Marketing team will give priority to expand market share through complementary products and new distribution channels. The Business Units leaders are focused on their target markets and performance metrics to be achieved. R&D scientists and engineers tend to see opportunities in new technologies developments. Now I would like, my dear reader, you stop a moment and think with me: we have described above a diverse perspective in an organization that are clearly critical do succeed in an innovation program, nonetheless without a strategy to connect the dots and articulate those perspectives around common priorities, the power of diversity becomes self-defeating. Pisano also presents in the paper a took that support a lot the corporate leaders to think about this critical connection: The Innovation Landscape Map. The took that was developed by him and his scholars (William Abernathy, Kim Clark, Clayton Christensen, Rebecca Henderson, and Michael Tushman) characterizes innovation along tow dimensions: the degree of change in the technology and the degree of change in the business model. Together the dimensions suggest four quadrants of innovation: (i) Routine innovation - based in incremental products improvements related to the company’s existing technology and business model; (ii) Disruptive innovation - requires a new business model but not necessarily a technological breakthrough; (iii) Radical innovation – the challenge in this quadrant is purely technological. Research with a technological nature that generate new technologies capable of completely changing the game in an existing business model; (iv) Architectural innovation - combines both technological and business model disruptions. Those are the most challenging for companies. The corporate innovation strategy must specify (make it noticeably clear and evident) how the different types of innovation fit into the business strategy and the resources that must be allocated for the development of each one. Most current publications on innovation highlight radical, disruptive and architectural innovations as engines for growth. Nonetheless routine innovation is the one that receive nowadays the biggest piece of resources from companies around the world. Companies should not just focus on routine innovation. Instead, they should structure a portfolio of innovation projects composed of different types of innovation, which would make it more likely to succeed in the face of the economic changes we have undergone in the years worldwide. There is a challenge to corporate leadership must face: to recognize that innovation strategy must evolve. Like the process of innovation itself, an innovation strategy involves continual experimentation, learning, and adaptation.

Stefan Thomke wrote in his paper published by Harvard Business Review - Building a Culture of Experimentation (21) - “To successfully innovate, companies need to make experimentation an integral part of everyday life—even when budgets are tight. That means creating an environment where employees’ curiosity is nurtured, data trumps opinion, anyone (not just people in R&D) can conduct or commission a test, all experiments are done ethically, and managers embrace a new model of leadership”. In this paper Stefan highlights the surprising power of experimentation to promote innovation in the corporate world.

However, in order to realize the transformative power of experimentation, it requires sustained commitment. It is not enough just to provide the right tools (although this is also essential) to make experimentation a lifestyle within the company. It is necessary to promote behavioural changes at all levels of leadership if the culture of experimentation is to be solidified. The lesson is that it is not so important if an experiment is successful or fails; what matters is how decisions are judged under uncertainty in an organization. They should not be based solely on faith or personal opinion. If they can be put to the test, they must be.

 This is not a simple, linear journey (I am fully aware of that!). The changes are not easy to be carried out, but they will be fundamental to transform the corporate management model to be employed in order to promote an engine of innovation that will overcoming the nowadays existing challenges (also the future one!).

My objective in this paper was shared some of the stars that illuminated my pathway through this wonderful world of innovation. I firmly believe in the power of design thinking to understand the needs of people and the environment that shape contemporary challenges. I am convinced that strategic alignment between innovation and business units, with a focus on understanding the real value problems to be solved, will allow us, in a short time, to establish corporate innovation cultures capable of overcoming the challenges of the contemporary world and passing delivering value to people and the environment.

For those who survived through this extensive reading (at least in the current molds of readings found on the internet and on social networks) I would like to say, "Many thanks" and Please let me know your considerations. It will be fundamental so that I can broaden my view on the horizon ahead.

See you in the next reading.

References

1. Cambridge Dictionary. Cambridge Dictionary. [Online] March 07, 2021. https://dictionary.cambridge.org/dictionary/english/innovation.

2. Gulati, Ranjay, Nohria, Nitin and Wohlgezogen, Franz. Roaring out of recession. Harvard Business Review. 2010, March.

3. IDEO DESIGN THINKING. [Online] [Cited: March 08, 2021.] https://designthinking.ideo.com/.

4. Brown, Tim. Design Thinking - Uma metodologia poderosa para decretar o fim das velhas ideias. Rio de Janeiro-RJ : Alta Books, 2017. ISBN 978-85-508-0134-6.

5. d.school. [Online] [Cited: March 08, 2021.] https://dschool.stanford.edu/about.

6. Doorley, Scott, et al. Design Thinking Bootleg. s.l. : d.school at Stanford University, 2018.

7. Oficial website. weme. [Online] [Cited: March 11, 2021.] https://www.weme.com.br/.

8. weme. Seja + ágil.

9. Takada, Carolina Kia, Bueno, Maurício de Campos and Foschini Jr., Wagner. Bizhack <programando organiza??es>.

10. Customer Heads-Up: o que é e como usar para manter a relevancia da proposta de valor da sua empresa. weme. [Online] [Cited: March 11, 2021.] https://www.weme.com.br/blog/customer-heads-up?utm_source=instagram&utm_medium=social&utm_campaign=customer-heads-up&utm_content=linktree.

11. Cultura de inova??o: 4 li??es da vida real para colocar em prática na sua empresa. weme. [Online] [Cited: March 11, 2021.] https://www.weme.com.br/blog/cultura-de-inovacao?utm_source=instagram&utm_medium=social&utm_campaign=cultura-de-inovacao&utm_content=linktree.

12. Por que os programas de ideias de inova??o falham? (E como garantir que o seu tenha sucesso). weme. [Online] [Cited: March 11, 2021.] https://www.weme.com.br/blog/programa-de-inovacao?utm_source=instagram&utm_medium=social&utm_campaign=programas-de-ideias-inovacao&utm_content=linktree.

13. Do design à agilidade: um novo modelo para aumentar a relevancia do P&D em grandes empresas. weme. [Online] [Cited: March 11, 2021.] https://www.weme.com.br/blog/design-agil-pesquisa-e-desenvolvimento?utm_source=instagram&utm_medium=social&utm_campaign=design-agil-pesquisa-e-desenvolvimento&utm_content=linktree.

14. Nucci, Carolina. 5 obviedades n?o-óbvias sobre Customer Centricity para aplicar na sua empresa. weme. [Online] [Cited: March 13, 2021.] https://www.weme.com.br/blog/5-obviedades-nao-obvias-sobre-customer-centricity-para-aplicar-na-sua-empresa.

15. Silveira, Taísa. O que é Design Thinking e quando ele n?o funciona? weme. [Online] [Cited: March 13, 2021.] https://www.weme.com.br/blog/o-que-e-design-thinking?utm_source=instagram&utm_medium=social&utm_campaign=o-que-e-design-thinking&utm_content=linktree.

16. Harvard Business Review. HBR. [Online] [Cited: March 13, 2021.] https://hbr.org/.

17. Nagji, Bansi and Tuff, Geoff. Managin Your Innovation Portfolio. Harvard Business Review. 2012, May.

18. Satell, Greg. The 4 Types of Innovation and the Problems They Solve. Harvard Business Review. 2917, June.

19. O'Connor, Gina. Real Innovation Requires More Than an R&D Budget. Harvard Business Review. 2019, December.

20. Pisano, Gary P. You Need an Innovation Strategy. Harvard Business Review. 2015, June.

21. Thomke, Stefan. Building a Culture of Experimentation . Harvard Business Review. 2020, March-April.