What I learned from my first year in an innovation team.

I have spent the last year as part of Cisco's internal innovation program. As a result, I have read a lot of books and articles on how to do innovation well, and tried to combine them with a bit of my own experience of working in innovation in various companies to create a "lessons on innovation" article. Obviously, my views are totally my own, and I do not attempt to represent Cisco in any way in what I have to say. So, what have I learned?

Innovation is a team sport.

As an innovation leader, it’s tempting to set up a framework in which to assess the value of ideas. I have seen this variously described as “let’s do this startup style” or “open innovation”, but it’s a risky approach inside a corporate organisation. The problem is it encourages competition between teams and groups, rather than collaboration (unless your company culture is *extremely* strong). This can reduce what would be a useful filter to a “beauty pageant”.

To see innovation flourish, it’s important to avoid tribalism at all costs. Allow small, cross-functional teams to aggregate organically around new ideas - and be prepared to break up cliques that form. That way, you avoid the “zero sum” problem that teams, especially in big corporates, often suffer from - the mistaken idea that for me to win, you have to lose. There is an important extra component here; to allow teams to aggregate, you need to provide what I like to call “weakly-coupled focus” - areas which are rich in opportunity for teams to form, but which are not necessarily the target area for the innovation process, they exist merely as a starting point.

Incentives are important.?

The reason that startup backing from VCs can be useful (and incidentally, this is something else I would very much like to talk about…!) is that startups have a plurality of VCs that they can go and talk to. That diversity of opinion and experience can help to mould and shape the ideas of founders, and encourage creative problem solving. It also holds the VCs to account for their decisions - you’re only as good as your last year in that world, and that can force recalcitrant investors to be more proactive.?

In a corporate setting, it is rarely the case that leaders are given their own heads, and their own budgets, and told to go out and “invest” in their teams, and to me that’s a shame. If you want to do the startup thing, you need to give *everyone* in the project equity in its success. Incidentally, this points in a curious direction too - perhaps one (totally heretical!) way to motivate employees and management would be to give them a sliver of the pie. Startups have this idea nailed already - give people equity in proportion to their risk, and their work or investment in a project, and watch their motivation rise. Average that same cost across everyone in an innovation team according to their pay band, and watch them stagnate.

Context over control.

Innovation, like data science, is an experimental discipline. Sometimes, the surest slam-dunk of an idea will fail to work out for unexpected, or even expected but unseen reasons, whereas that wild “moon shot” becomes dead cert once investigation starts. As such, there isn’t so much you can do when starting out to be sure that your investment won’t be “wasted”.?

It’s important to allow teams the freedom to pursue ideas even if they are not immediately productive, but to give them the context to understand when to stop or to pivot. If most members of a team believe that an extra month of engineering time is a good investment, and that it’s a good bet for improving the company’s bottom line, they should have the freedom to do that. Even if the project fails, they will have a month more of experience in a new field or technology, and that might enable them to get ahead in the next project. This requires a flat structure, an emphasis on honest, constructive feedback, and a team that has really internalised what is best for the company. If you have all of those things, it becomes easy to see when a project has reached a break point, it’s when good team members start to drift away.?

Thinking in bets.

This approach also requires leadership to “think in bets”. How much would I bet that this product or idea will make it to market? What does my portfolio of projects look like? Have I spread my risk appropriately? I always think of this as akin to picking a risk level for pensions (boring, I know). When you’re young, you should pick high risk, high reward investments, because you have time to recoup any losses you make from your enhanced risk before you retire. As you get closer to retirement age, you taper your risk to ensure that you come out with at least what you have now.?

I would argue that most *disruptive* innovation teams don’t take sufficient risk. They are at the teenage end of the scale, and yet leadership often require a “zero risk” approach. There is no such thing, and too much process gets in the way of truly disruptive thinking. The biggest risk factor here is having the innovation team too tightly coupled to the existing business - people from the business will already have strong views on what the company should do next, often couched in the language of risk, and this can cloud their impartiality.?

This whole section obviously ties in closely with “context over control” and “incentives are important”.?

Plan for transformation.

Geoffrey Moore writes clearly about the importance of having a “transformation zone” to bring potential new sources of revenue to market. He also emphasises that this is a painful and expensive process, and that you really can’t do much else whilst you are transforming an innovation product into a core business one. I think it’s this cost and pain that can cause companies to look away, and try to get by without such a process.

The key point here is that, if you don’t have a plan and a strong and charismatic leader to deliver on it, then you will always run into the “not invented here” problem. Taking a new project to an existing business unit, showing them how great it is, and hoping that they will adopt it simply isn’t enough. Business units are always too busy making money now to be sufficiently motivated to turn away from that profit today for some speculative success tomorrow.?