Operational Excellence Can Kill

The meeting with the executive committee isn’t going to be easy—for yet another year, the company’s innovation efforts have yielded only lackluster growth. The head of the core business, which has been in a long, slow decline, will undoubtedly challenge you again:

I appreciate the efforts of our Head of Innovation, but there’s a significant gap between the goals of our innovation program and the reality of its achievements. Perhaps we’re over-investing in innovation. I could drive incremental growth in the core business if we redirected a little of the funding.

Maybe this time, his words will have more impact—you need a real innovation success.

A few years ago, it all started so well—idea fairs, lots of new projects, and bold ideas. The executive commitment to renewal and growth through innovation drove excitement across the organization. But somehow, things haven’t lived up to their promise. While many efforts have delivered results, most big ideas seem to have produced only meager returns. And the boldest projects seem perpetually struggling and often underfunded. You’ve heard whispers of “innovation theater” a few times in the halls. Confidence among the ranks is waning.

This nightmare scenario occurs all too frequently across the corporate landscape, and its causes are usually misdiagnosed. My diagnosis recognizes a paradox:?lackluster growth from innovation is often an unintended consequence of otherwise good business processes built on operational excellence. As a practitioner of innovation and portfolio management for thirty years, this paradox is one of my top surprising lessons:?operational excellence can kill.

The cure isn’t a bold new innovation initiative or anything like that. Instead, the remedy is first the recognition of these unintended consequences and then unwinding them. It starts by taking a strategic perspective on the growth portfolio and having a strategic forum focused on making choices about where and how much to invest.

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