Stop Externalizing Innovation

Large companies, like banks, know they have to innovate. You don’t need 100k$ slideware to tell you that. But how do you innovate? Innovation doesn’t happen because of a brilliantly engineered organization or process, it happens because a company’s culture allows it. People in that company at the lowest levels can bring forward ideas and are empowered to solve problems. They are positioned to innovate because they are deeply involved in the problem domain, and because they manage the core systems that run your business.

The people who are best able to change your company are those that consultants want to tell you are the problem. They want to tell you that they are too old, and the bureaucracy to thick, and the process outdated.

To address this it’s a common trend to create an ‘Innovation Hub’. The idea is to create the sought after culture that every innovator wants: You put them in a loft space and stock the fridge with all the free snacks their hearts will desire. You even physically separate them from your core technology groups. And something magic happens! They start cranking out really cool apps, in weeks! These apps work on computer-phones and computer-tablets and computer-computers!

But they don’t connect to anything. Maybe you could do that in phase 2? But you will have to talk to the old IT groups, and integrate with those core systems… oh no…

The result is that nothing of impact has been accomplished. Perhaps you now employ some people that are more familiar with more modern technologies — that’s good, but they still won’t be able to change your core business — the one that makes the money.

If you want to disrupt your company, you have to do something much more difficult, something that we have already been talking about for years: Empower. If you keep betting on consulting companies to change your company all you are going to do is repeat the same process you and your predecessors already have, just with the latest set of buzzwords and technologies. These companies have not run your business, or build the impressive and complicated software that it takes to run your company. Your people did that, and continue to do that. They are the domain experts, and they are better positioned then anybody to make the change.

Instead of the external innovation hub, focus internally. Find and promote top talent. Remove dead weight. Find ways to empower software engineers who have the talent and ambition to make a difference. Know your own organization. Master interfacing groups processes, then work with them to improve them. Stop externalizing Innovation.