Toxic Innovation (and how to avoid it)

Recently I’ve noticed that while some people display a reverence to the word ‘Innovation’ as the saviour of established corporations. Others warily eye the money pit that so frequently fails to deliver.  Some investors and VCs utter the ‘I’ word in the same breath as the names of meteorically ascendant unicorns. Others distance themselves from its association with the desperate and typically flawed throes of established corporations, clinging to relevance amongst a sea of more agile start-ups.  So is the term ‘innovation’ still relevant or is it a toxic busted flush?

In this article I’ll try to answer that question by leaning on leading innovation research and publications as well as my own experience in what the Centre for Entrepreneurs called the ‘Most effective innovation unit in Defence’. Along the way I’ll introduce some practical measures to help you mitigate the unrelenting waves of scepticism and innovation fatigue. I’ve put a checklist at the end that you can use to give your organisation a quick Innovation Toxicity Assessment. Enjoy!

Why do Innovation Engines Fail?

In 2015 a Cap Gemini report, ‘The Innovation Game: Why and How Businesses are Investing in Innovation Centers’ quoted an ‘innovation expert and senior executive at a leading Global bank’ (impressive reference eh?) as saying that ‘80-90% of innovation centres fail and end up being a massive waste of resources.’  To be fair, I’ve seen more optimistic figures but nothing better than about 50%.  So why is that? 

Put simply, if there is one single reason that innovation engines nosedive it’s because of their failure to deliver value to customers and stakeholders at what General Jim Mattis called in his seminal 2018 National Defence Strategy , ‘performance at the speed of relevance.’ I guess that most of you knew or had sensed that already, but rather than end this article there, I’ve broken the idea down into 3 key areas that I believe inhibit delivery and lead, inevitably, to innovation toxicity:  1. Failure to focus on the Customer, 2. a lack of discipline through to delivery and 3. the absence of organisational team ethos. 

1.             Failure to focus on the customer

Many innovation initiatives simply go stale because the customers, internal and external don’t see relevant timely outputs. This can be super frustrating for customers or resource managers if precious funds, publicity and human capital have been funnelled towards these initiatives. The Cap Gemini report above highlights two ‘cardinal sins’ that lead to this pitfall 1. Looking too far into the future, and 2. Getting involved in routine business. 

Looking too far into the future.

Looking too far into the future is a dangerous game for innovation centres. I’m not saying that thinking big or long is a bad idea, just that it needs to be done carefully. Here’s why. Too far into the future means immature technology, high expense, slow returns and disproportionate organisational oversight. Immature tech will often require serious funding for a number of years before anything falls out of the sausage machine. Encouraging busy people to support innovation initiatives for long enough is going to be extremely challenging, even before you consider organisational churn. If the C-Suite changes too much the initiative may lose support risking project stagnation, institutional irrelevance, and ultimately failure. Additionally, longer, more expensive projects attract attention leading us to the next point.   

Getting involved in routine business.

Beyond cash and time concerns, getting involved in routine business or ‘organisational capture’ is a grave risk for any innovation centre, and especially their larger, longer term projects. Many such centres exist outside or at least parallel to the core business to avoid the corporate antibodies killing them off before they start but, without an alternative business focus, their shiny exterior can attract attention; the Eye of Sauron is cast into the shires. Innovation project owners are then forced to fight battles on two fronts; outward with the challenges inherent in a complex project, and inward with fearful, bureaucratic and stifling oversight. Of course, in this scenario, the core business thinks it’s helping, adding some much needed governance and support. I’ll let you decide but this article in Wired Magazine might help frame your thinking, ‘Corporate innovation does not work,' WIRED2016, By Matt BurgessB

The point is; in both these situations the user and stakeholders lose out. The resources are fixed for a long period of time and they don’t deliver. Consequently, invested groups lose interest, faith and patience. So how do you think big and look long without falling into these traps? There is a simple 2 step answer.

 i.    First, focus on the user. Spend more time with users and stakeholders, understanding their problems, objectives and needs than you do on idea generation or with solution providers. It can be really attractive to spend time schmoozing the next exciting tech company but ultimately users will be the arbiters of success or failure, so alignment with them is critical. An innovative splinter cell buoyed up by a tribe of grateful advocates is much harder to dismiss than one touting exotic solutions, but struggling for relevance. 

ii.    Second, take a portfolio approach.  Innovation centres need some projects to keep the lights on, things focused on real user needs with rapid returns. These projects may not be paradigm shattering game changers, but they’ll pay the rent for the big hitters that you have on the back burner. The portfolio then needs a few higher profile, stretch-targets, that turn heads and deliver significant benefits to the parent organisation. Finally, we need a few outliers; 10X projects that, if successful, will save thousands of lives, earn billions of dollars and a spot on the pages of @Wired Magazine. What’s the right ratio? well I guess there’s no right answer but HBR Review, ‘Managing your Innovation Portfolio by Bansi Nagji and Geoff Tuff found that ‘Companies that allocated about 70% of their innovation activity to core initiatives, 20% to adjacent ones, and 10% to transformational ones outperformed their peers,’ so who am I to argue?

This hypothesis aligns to another HBR article, ‘Why Innovation Labs Fail’ in which Simone Bhan Ahuja argues that “the curtain comes down quickly, either because ideas from these labs are disconnected from real customer needs or because no one is on the hook to carry the ideas through to implementation.”  Which makes the point nicely and leads me to the next, discipline through to implementation.

2.             Lack of Discipline through to delivery

Even if an innovation centre does focus on the right things, without discipline it will be doomed to failure. This is because doing new things in established organisations is hard. It’s not just human resistance, what @Matthew Syed referred to as ‘cognitive dissonance’ is his seminal work, ‘Black Box Thinking’ that makes doing new things tough, but also issues such as policy, safety and legal compliance that rightly have to be overcome before a new system, process or capability can be fully implemented in the existing business. These integration challenges are difficult and resource intensive so if anyone is going to overcome them faster, better, cheaper than the existing system they are going to have to work harder, faster and smarter. This makes perfect sense, if it was easy the core organisation would have done it already. Unfortunately, that’s why people often take an easier route, the route that leads to a trap, only doing the fun stuff.

There are 2 really fun aspects to innovation, creative ideation and scouting for cool new solutions. But because they are fun people tend to over-index on them, collecting way more ideas and cool tech solutions than the innovation centre or its parent organisation can deal with. This seems to me to be particularly likely in the early days of a new innovation team when turning on the ‘idea-tap’ is the only thing we know how to do. When we make this mistake we are hoping that if enough ideas are generated something will stick. In my experience, this is not the case and the non-stick coating on well-established organisations makes Teflon look positively gluey. This can create a pool of disappointed stakeholders, people who have invested time and cognitive effort into ideas workshops only to hear nothing more of their effort. On the supply side, there will be a bunch of companies that take the time to engage but never receive so much as a courtesy email in return, let alone any actionable feedback. In the parent organisation, there are leaders with nothing to show for their investments. This leads to a failure of trust, disengagement and toxicity but it’s all easily avoidable with 4 simple steps:

 i.    Resources. Innovation teams need to be correctly resourced to keep the innovation pipeline running from ideation to implementation and everything in between. This requires huge effort so if the team cannot be resourced, reduce the task. Better to deliver one great solution for one grateful customer than to raise and dash the hopes of many.  Strategyzer Blog, Innovation Requires Time and Resources.

ii.    Courtesy. Innovation organisations need to stimulate creativity, they need to encourage the organisation to question itself and challenge assumptions. But they need a core team of disciplined and focussed individuals whose job it is to deal with the result, to ensure that quality feedback is provided to all stakeholders. A short MVP for courtesy:

a. Always say ‘thank you’ to stakeholders for engaging.

b. If the project isn’t going forward, say so, say why and what happens next, eg ‘your idea will be stored on the system and will be reconsidered if xyz etc…’

c. If the project is going forward, say so and include next steps.

d. Deliver. Delivery is the best form of feedback, focus on pace and delivery, give stakeholders something to say ‘thank you’ for.

iii.    Get ruthless at saying ‘No’. Innovation centres need a robust method of selecting what comes into and, more importantly, what doesn’t come into their pipeline. Saying ’no’ to exciting tech projects can be hard but it’s vital if we’re going to be able to say yes to the truly great ones. So a ruthless focus and creating a balanced portfolio of projects that delivers ‘performance at the pace of relevance’ is important; this model from Strategyzer is the best I’m aware of.

“How did Nel and his team at Lowe’s beat the odds? He spent a whole lot of time “building and putting process and rigour to…identify what to work on”.  Simone Bhan Ahuja, ‘Why Innovation Labs Fail’

 iv.    Measure what Matters.  Select the metrics for success that you are going to measure yourself against and track them relentlessly, John Doer’s book on the subject is a great place to start. You will know what matters to your organisation but metric number one should always be focussed on ‘Delivery’.

3.             Failure to play as a Team. 

While there needs to be a high performing, disciplined hub at the core of any innovation engine, it’s a team sport and the whole organisation needs to play their part. Too often in large organisations people feel unable to share their real thoughts, concerns and ideas for fear of reprimand or embarrassment, they don’t feel part of the innovation process. But these people are exactly the people that innovation hubs rely on to deliver their new ideas into the core business, they are the integrators, the commercial and financial staff, the security and safety experts that innovation centres will struggle to retain in sufficient numbers themselves. Innovation activities often add additional workload to these people with unreasonable timelines and unfair demands. To make matters worse, while the core organisation feels bureaucratic constraint and additional burden, the innovators work from a hipster shared office space enjoying cinnamon caramel frappe on tap and playing in the ball pool. This disparity can drive a wedge between the two parts of the team and introduce an avoidable resentment. There is a solution, although I confess, it’s not so simple.

i.    First, to avoid an Us-vs-Them mentality, everyone in the organisation needs a common purpose, (see Start with Why by Simon Sinek), to know that they are part of the innovation process and that their contribution is valuable. Establishing this is a key function of leadership and it’s not as easy as it sounds. It requires leaders to encourage people to question strategy, policy and direction, to rock the boat. The leadership style that I’ve seen work best here is ‘Confident Humility’, humility to know that you don’t have all the answers and to encourage challenge, courage to know that you have the skill experience to deal with the consequences and make good decisions. Clear, consistent leadership is vital to successful innovation and it’s too large a topic to cover fully here but suffice to say that setting a common purpose and establishing the right culture is a good place to start.  I’ll be writing a separate article on Innovation Leadership in the next few weeks. 

 ii.    Second, people need to know that their opinions are important and that they are safe in sharing them. They need to feel an obligation to dissent when they know something is wrong. This is the essence of Psychological Safety, a subject first rigorously studied by @Amy C Edmondson and captured beautifully in her book The Fearless Organisation which I strongly recommend to you. Setting a purpose and building a Fearless Organisation in which everyone knows that they are an integral part of a constant improvement process is not easy, it requires consistent leadership, engagement and encouragement but there are a few practical things that we can do:

a.   Say ‘thank you’ more. When someone in the core business helps you, say ‘thank you’, when someone in the core business criticises your work or your team, say ‘thank you’ and work with them to understand why.

b.   When the innovation hub delivers something, include everyone from the core that was involved in the celebration, (whether they helped or not!).

c.    Make sure your portfolio is solving some of their problems, this is the best evidence someone can get that they have been listened to and it can have a huge effect on people.

d.   Offer your partners in the core a frappe and make them welcome to the ball pool.

Conclusion

Delivering on the innovation promise is not for the feint hearted. To prevent innovation becoming a toxic brand, those of us charged with delivering on its bold promises must avoid ‘organisational capture’ by ensuring that we are delivering to our customers ‘at the pace of relevance’. We must be disciplined in identifying the best ideas, turning investments into value and ensuring that projects realise their full potential. Innovation is more a discipline than it is an art. And finally, we need everyone on-board. Margaret Mead said ‘Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.’  It’s one of my favourite quotes and I firmly believe it but I also believe that, ultimately, it is the influence of that ‘small group’ on the masses that really makes the difference. That’s why it is our job to build fearless, progressive organisations in which everyone has a common purpose, a voice and constant improvement is on everyone’s to-do list. 

So is innovation a toxic brand? No, I don’t think so. And until there is a better phrase to capture the essence of a focused quest for improvement, change and the realisation of new value, I’ll continue to use it. But there is a real risk that, if not carefully managed, innovation efforts can do more harm than good. As we’ve seen here, with a few simple steps, we can harness opportunities and creative thinking to deliver tangible benefits for our organisations and avoid innovation toxicity. 

Thank you for reading. I hope you’ve found it useful. I’ve only considered the avoidance of innovation toxicity here but next I’ll be publishing a series of articles focused on the ingredients for innovation success and how to build a world class innovation engine, hope you’ll read them too.

Here is the checklist I promised.

ADIE'S INNOVATION TOXICITY CHECKLIST

CUSTOMER FOCUS

How much time do you spend with users?

A.     I spend at least 30% of my time talking to my users, understanding their problems, needs and keeping information flowing.

B.     I see the users as often as I can but I’m often tied up at trade fares, meetings and digging through bureaucracy trying to make progress.

C.     Users? What users? Have you seen this cool new drone?

How balanced is you portfolio?

A.     We have a balanced portfolio which is regularly delivering value to customers and the organisation; we have some stretch targets and a few 10X initiatives that will make a huge difference if they succeed.

B.     We have a mix of things in the portfolio but the big projects and the bureaucracy around them take up so much time we struggle to do anything else.

C.     Portfolio, pah!! We’re going to Mars!!

DISCIPLINE THROUGH TO DELIVERY

Do you have the resources you need:

A.     We have team of focussed, dedicated professionals; we are resourced to the task and get stuff done.

B.     We have a group of people that work for us full time but we struggle to deal with the project backlog and we are over-matched by the demands on our time.

C.     Team, what team, I am the innovation centre!

How courteous are you to your stakeholders?

A.     We are extremely courteous, we always express gratitude for contributions and engagements and provide actionable feedback at every opportunity. 

B.     We try to be polite but simply don’t have the time to reply to everyone, there are too many projects to run.

C.     Stakeholders, what stakeholders?

How good are you at saying no?

A.     We have a structured approach to assessing opportunities and, although it can be hard to choose, we often turn down good projects so we can focus on great ones.

B.     We try to prioritise but it’s really hard with so much exciting tech out there and so many compelling problems to solve.

C.     Bring it on, I can cope, throw a tech bone and I’ll chase it, let’s do some blue sky thinking…

How good are you at measuring what matters?

A.     We have established key metrics and track them using our carefully selected tools and processes, they are core to the way we do business.

B.     We have identified the metrics that matter but struggle to keep track of them with so much going on.

C.     I don’t need metrics; I keep all my plans in my head.

TEAM SPORT

How engaged is the core business in innovation activity?

A.     Highly engaged, they are an intrinsic part of the way we source problems and integrate solutions. The core business is like an extension of our Innovation Centre.

B.     They are engaged but there are sometime frictions around resources, process and the way we things get done. 

C.     Core team? Obstructive losers the lot of them. Frappe anyone? 

How well does your organisation share a common purpose?

A.  Clearly, we have a common goal and we are on this journey together, we do what we can to help each other.

B.   Most of those I work with get the message but some of the back office staff are process driven bureaucrats that seem to be on a separate agenda.

C.    Organisational purpose? I don’t even know why I’m here! 

How Fearless is your core organisation?

A.     Our organisation is truly fearless, everyone has a voice, they are engaged and we are all aware of our obligation to dissent.

B.     People are encouraged to speak up but it’s usually less hassle to keep your head down and manage the status quo. 

C.     Shh!! Are you trying to get me sacked?

How did you score?

Mostly As. You are delivering value and there is little chance of anyone branding innovation as toxic in your organisation. You are cruising to innovation success.

Mostly Bs. Don’t worry, you are not alone, there will be many innovation organisations in this bracket. There are likely to be a few naysayers in your organisation who spit at the thought of innovation already but a few tweaks and you will soon be well on your way to success. 

Mostly Cs. Oh dear. People in your organisation are already sick to death of the word innovation; it has become a totally toxic brand. But all is not lost. Start again with a fresh piece of paper, find your users, put some discipline in your processes and make innovation a team sport and you will soon be back on track.

Good luck!!