The innovation department
Innovation departments don’t innovate: here’s what does.
In the last post On Innovation, I covered what “innovation” means for businesses both in concept and practical application with real world examples.
Let’s look now at your best chance to become an innovator.
Innovation is about the product
Maybe it comes as a surprise to know that companies perceived as the epitome of innovation have no innovation departments. None at all. Zero. This class of companies spends disproportionately more effort talking about their fast evolving products than selling people the “we are innovating” spiel. Theirs conferences, events and marketing campaigns focus solely on the product and how that changes the world. The product, not “innovation” is their story.
For them, innovation doesn’t exist independently at the fringes of the business or as an add-on to products that can be turned on and off as the board, stakeholders or investors decide.
Think about Tesla. Tesla created an electric car people want to buy. All the efforts and talks from the company focus on how they made their car, car’s future developments or their attempt to have a fully automated manufacturing process. Today we have books covering their journey as a company to overcome issues with the battery, the motor, the massive display screen placed in the main console and even the door handles. It’s all about the car.
Netflix on the other hand is all about “delivering excitement and entertainment”. They survived the expansion of the Internet, which killed the DVD rental market by changing medium. Their engineering blog covers how many tools they invented to improve entertainment delivery such as machine learning algorithms for user recommendations in 2007, a distinct user interface design and fast content delivery on multiple types of devices. This is why they are a leader and have been so for more than a decade. How do they respond to the demand for more variety in their video entertainment? Netflix starts their own TV series and movies production and challenges the Hollywood status quo. Attempting such bold moves, will likely make people think you are crazy rather than a sound business thinker just like it happens in the Jeff Bezos interview below. But real innovation lives by definition outside the box. Leading means everyone is behind you and ahead is only darkness. Leaders show how to do it differently and own it, seeking no place to hide, excuses or blame.
Companies perceived as the epitome of innovation have no innovation departments. None at all. Zero.
Here’s Amazon’s Jeff Bezos talking about his company’s ambitions in ’99 and responding to questions about investors expectations, what clients want and the corporate arrogance to take on Walmart with a company only 3,000 employees. Amazon had to expand their business to accommodate for the wildest crowd of customers. The necessity of staying in business made them become “customer centric” for real. For decades, they have delivered a world-class customer experience that other companies still look up to and some only now start to get it. How many times did he use the word innovation? Who is Jeff going to blame for failing to change the industry? What can you read in his body language?
Apple built a smart phone average people can use, far better than anyone else’s. Just listen to Steve Jobs talking about the problems they had to solve to create a better phone than the competitors.
Change instead innovation
It’s time to stop calling it “innovation”. Let’s call it change instead.
When is the last time you woke up one morning and did some progress?
We cannot do innovation in the same way we cannot do progress. We make changes through our actions and later on, we observe their consequences. We can only declare our actions a success a posteriori. While we are in the process of making those changes we can never tell precisely how much of progress or how much of a leap we are making, if any.
Looking backwards at historical activity, one might be able to conclude a product is innovative or tell which changes led to progress. It never happens when looking forward. Having high hopes that our actions mean something has nothing to do with the real, tangible results we get in the end. The outcomes of our actions and changes brought into this world is yet to be observed and assessed, by the history!
So far we have that “Innovation or progress might happen through change.”.
Culture of change
Since innovation happens through change, we now need to design cultures where change is one of the core pillars. Why cultures? Because changes to the business cannot be the outcome of random chance nor people of an organisation left to their own devices and whims. To be meaningful it must be guided, directed and pointed in a direction that matters.
Change is risky and it might lead to uncapped losses of all kinds. Change is unpredictable and it never guarantees any results. In spite of all these, the winning companies are those that embrace change and make it first class citizen in how they operate. How do they do that?
However, change as an outcome of our actions can be managed and turned into an effective tool for producing the desired effects while being in control. Continual improvement processes, lean management, Kaizen and agile methodologies propose a diverse set of frameworks and systems for managing the continuous process of introducing changes to a company so that clear objectives are met while the associated risks mitigated.
“A culture of change within an organisation might lead to innovation.”
The critical path or where to innovate
The largest leverage actions have, within a company, lies on the critical path of its core products. Successes and failures on this path don’t add up, they multiply. Have too many half-baked pieces stringed together and your largest advantage cannot prevent your business from becoming irrelevant. Great companies are winning big on their critical path by using technologies, processes and methodologies to make the products of this path as effective as possible, at capturing their next customer. Of course! This is one place where change matters the most.
“A culture of change that focuses on the critical path of the product might lead to innovation.”
The practice of change
When a change framework is wired directly into your business’ pulling forces, the lag time between the environmental change and company’s response decreases rapidly. It is 100% sure problems are going to appear on each company’s road to success. What is always unknown is when and where is this going to happen. For your company to react in a timely fashion it must first become aware of the new difficulties and then have the tools to naturally respond to the environmental change as soon as possible.
The word “naturally” stands here for the practiced discipline of applying your own thinking, calculations and judgements to the problem, starting from the first principles and yet considering the existing available options. Not responding to the pressure to stay within the boundaries of the “best practices” evangelised by your own industry, consultancies and experts, gives you the chance to take different paths when the standard solution becomes inadequate and a drag. Practising and applying what is known and actively done by the industry without questioning its worth only takes you to crowded places.
No, this is not reinventing the wheel. It’s rediscovering the wheel!
This practice of independently solving problems keeps you aware of the trade-offs, the value of the existing approaches and the appreciation for why they are still in use today as well as the right circumstance for their use. A good understanding for the state of the art methods provides a robust, reference framework to assess and analyse current or new solutions. A good framework leads to consistently picking the right options for your critical path. Good choices where it matters, multiply their value together to create disproportionate results: a great product many customers line up to buy and your ability to satisfy the demand.
A good example of this thinking is in Jeff Bezos’ interview linked above when talking about the warehouses vs. high street shops. He’s seeing something everyone else didn’t even consider from its logical standpoint (“bad math”) and flagged as “arrogance” by the reporter.
More often than not, your team has already discovered the business and technical realities that surround your specific product covering everything from challenges to strengths. This happened organically, as a by-product of them doing their daily jobs. Unless there is a pulling force to bias the team members to speak up, take action and fix the problem as soon as they appear, these insights will die unfulfilled. A winning culture facilitates the process that connects these random insights of your team and blends them in solutions. Since all your employees are caring, smart and well intended then you should ask yourself, what is your culture and who are your leaders being that stand in the way of change and progress?
A culture that establishes a disciplined change methodology of the critical path of a product might lead to innovation.
The Amazon approach
Let’s turn to Amazon career’s website. They do call their product “innovative”. Today, April 19th, 2020, there are 22,205 jobs listed that contain the word “innovation” either in the title or description. Software developers and the engineering positions amount to 13,945 while the rest are distributed across the entire business from administrative support, warehouse and fulfilment associates to legal, customer service and corporate operations. See the list below created from https://www.amazon.jobs/en-gb/search?base_query=innovation&loc_query= .
Amazon behaves as if “customer satisfaction” is everyone’s job.
Or differently said, everyone is responsible for trying new ideas and delivering change from warehouse staff to lawyers and the CEO.
When you start your interviewing process with Amazon you immediately run into their 14 principles of leadership. It’s on their main career website. That’s their framework for bringing change to the world. During the interviewing process you get to absorb, discover and rediscover these principles over and over again. They grill you on them as well to make sure you can flexibly manipulate these concepts in logical thinking too. This is how they manage change. These principles are for everyone that works at Amazon, regardless of where they sit in the corporate hierarchy. To me, these principles create a gravitational pull for the entire company towards focus on change. Amazon’s change is fast, of good quality, simple and obsessed to satisfy their customers. This is the simplest explanation for how they get new customers and why the existing ones never leave.
If you’re new to Amazon’s principles dig around the Internet for what they mean and their impact. These principle have been around for decades. It is surprising to see how far their reverberations reach. It proves a well-designed culture can scale success globally to even when the company has more than 100,000 employees worldwide.
Amazon decided to bring the next customer in through an intense culture that promotes everyone’s thoughtful changes towards customer satisfaction.
Tesla on the other hand doesn’t even use the word “innovation” in the about section or in career section for any of their positions?
Netflix doesn’t have an innovation department either. Instead of a big picture role they mention innovation in the context of “core engineering” if that makes any sense at all. They expect new hires to change their product’s content discovery system Senior Data Scientist — Product Experimentation and Analytics or their payments platform Program Manager — Payments.
Imported innovation
Some companies seek “innovation” externally. New problems are approached either via hiring new skills, contracting big consultancies or going to an external third party provider. The deep-pocketed corporations purchase patents in batches or even their competitors.
Their forward movement comes from adopting externally developed leverage. When done effectively it can deliver steps forward and keep the enterprises in the top echelon of the market. The adoptions of these novelties can actually work despite not being developed in-house.
Another way of staying in the lead is by making sure nobody overtakes you. There is a tremendous effort (and money) spent in this range of activities but that’s a chapter for another time.
The perception of innovation
The most intriguing, fascinating and yet sad approach is to do none of the above and spend your effort creating the perception innovation. One can go down the path of PR. It might work associating your brand with shiny, cool, new technologies or phenomena that are being perceived as futuristic or amazing. Despite being exploratory stage technologies or “innovations” at the brink of adoption they are not market ready. The focus is not on today’s actions that move the product forward but on the huge potential for humanity that lies, for now, beyond the horizon.
When one cannot be part of the action then the second best thing is being part of the conversation about the action. As played today, innovation is a spectators’ sport!
When done right this approach creates an aura of a forward thinking vision and progressive attitude. By sharing the spotlight with the actual doers, the brand gets smeared with the sweat of the actual game changers. The association bias works as expected. Such industries of increased interest with a lot of spectators are augmented and virtual reality, artificial intelligence, blockchain, IoT (Internet of Things), quantum computing, nano-technologies, electric cars, racing events, F1, genetics and space exploration.
Alternative ways of being around the action is financing VC funds or startups accelerators, organising events, conferences and proposing industry wide boards of all kinds that review, curate, oversight and facilitate some sort of access or the future of these disrupting technologies. If these fields are over our heads, let’s at least make sure we talk about it and it’s us deciding how they are going to be used. This briefly touches back to the earlier point of staying ahead by not letting anyone overtake you.
Innovation in this approach is an outward looking exercise focused more on the story, narrative, branding and perception than the actual change they seek to bring in the daylight.
An interesting yet congruent picture is depicted by the job characteristics of roles within the “innovation” departments of such institutions. The focus is on policies, strategy, governance, risk, communities, project management, industry threats and opportunities or investments. Although I decided against giving specific examples, as an interesting exercise, have a look around at the perspective on innovation big companies display on their public pages and ask yourself what are they actually seeking to achieve? One possible starting point is here.
The number and types of jobs created in big organisations under the “innovation department” umbrella can tell the perception and mind-sets these companies have about change and where they expect it to come from.
If I care about “innovation” here are a few questions I would try to answer when working for a company:
- What is innovation to this company?
- What is not innovation?
- How do they know what you did is innovation indeed?
- What gets you fired in this company?
- How many new approaches did a manager try today, last week, last month? How many of them failed and why? What worked? Was anyone fired or promoted?
- Is the company’s approach to innovation inner or outer looking?
- Where does the company think innovation comes from?
- Is there an innovation department? Do they have a set of tasks, directions and responsibilities for the innovation department?
- Are they in a pursuit for any magic sauce that keeps them ahead of competition or they focus on improving their status quo through diligent and intelligent effort.
You are already doing it
In all companies, assigning innovation to a special department that most of the times it simulates activity and stands as PR props is unjust towards the employees working hard, on a daily basis to keep the business going and make it competitive. These employees focused on the business as usual are the real innovators and their effort is what companies should keep praising in its “innovation” section. Or even better, drop the “innovation section” altogether and let the customers use the adjective “innovative” spontaneously when talking about your product or service. Just like Tesla, Amazon, Apple, Netflix or Google does.
Most companies are already doing innovation but they just aren’t aware of it. Innovation is how a company stayed in business for so many years. They don’t know it because it happens at grassroots and the employees saw the effort as being part of their daily business. Highfives to them were given around their desks not and with the C level suite followed by a big promotions and an internal newsletter with a word from CEO praising them.
Innovation is not a master insight delivered from a special bureau of thinkers that gets constantly enlightened by divine inspiration.
It starts with the daily sweat and it is made of the cumulative, daily adjustments of the business intricacies, the history of mistakes made and the viable solutions brought forward to pressing matters that threatened the business over the time. The surprising element when you get closer to the grassroots is that business survival and development has never been a direct consequence of the innovation department’s proceedings, ever!
Most likely these critical changes occurred through the good shepherding of common individuals that operate the business as usual without fanfare or being anointed into prestigious titles.
The employees improve things without asking for permission. Isn’t this what everyone asks for in every new job they begin: the ability to make a difference, make the company they serve a bit better and be recognised for it.
Many thanks to Christopher Riding for reviewing this post.
