The innovation imperative

Innovation must become a new normal in organisational life.

photo credit: Iván Díaz

In organisational life, there is business-as-usual and there is innovation. The former is what accounts for most of people’s individual time and effort. It’s what they get paid to do. It relates to the organisation’s core interest or business. And whatever the core interest is for an organisation, it becomes inevitably central to organisational life.

Innovation on the other hand is rarely central and rarely meaningfully prioritised. It’s more likely a peripheral activity. A pursuit undertaken by secretive teams, often working out of mysterious subterranean bunkers. Or meeting rooms with blacked-out internal windows. Innovation is rarely part of the ebb-and-flow of the everyday. Its value in the immediate-term is often seen to be negligible. And so it tends to be pushed to the sidelines. Or neglected altogether.

This has been the pattern of organisational life through the industrial age. Innovation usually happened on the fringes. It was called new product development (NPD for short). It was usually concerned with making incremental shifts to existing business models, products and services. More ‘sustaining’ innovation than truly ‘disruptive’ innovation, in the words of Clayton Christensen. In a world that changed more slowly and less chaotically than today, this was perhaps appropriate and fine.

In the digital age, things are very different. The pace of change is exponential. In fact, writer Azeem Azhar suggests we’re living in an ‘exponential age’. It’s trite to say it, but change truly is the only real constant in organisational life today. The more dramatic version of this is to say that every industry and market is open for disruption. Change has to be a more central concern, and adaptability to the change that is coming has to be built into how organisations operate. In this context of exponential change, innovation can’t be a one-off set-and-forget exercise. It has to be a constant and a new normal.

In this context, organisations can’t afford to keep innovation on the sidelines. But as much as innovation is acknowledged to be ever-more important, it remains more peripheral than it should be. A recent McKinsey study found that over 80 percent of executives say that innovation is among their top three priorities, yet less than 10 percent report being satisfied with their organisation’s innovation performance. There are exceptions of course and they’re well-known. In fact they’re well-known because they’re the exceptions. The outliers who place innovation at the centre of what they do, not the periphery.

There’s a bigger picture aspect to consider here as well. The nature of employment is changing. Work is no longer about a job for life. It’s more fluid and dynamic. Increasingly, employees must move between a variety of roles involving a range of skills. Continuous learning is thus becoming a vital part of working life in the 21st century. Here, innovation will have an ever-more important role to play. Where people are exposed to innovation and practice innovative thinking, they make great learning leaps. They exercise new mental muscles related to thinking in different and divergent ways. They learn to be adaptive and resilient in the face of change. Here, organisations have an opportunity — if not a responsibility — to help their people grow, develop new skills and become more T shaped. As David Epstein writes in his excellent book, ‘Range’, the future lies with people who can “dance across disciplines”. Innovation is where we get the opportunity to do more of that.

It’s really important then that innovation moves out of the periphery. It has to be more central and more constant across all types of organisations.

“Innovation happens when people are free to think, experiment and speculate.”
- Matt Ridley

So…how can we get there?

Now that’s a multi-billion dollar question which does not come with a simple answer. But there are massive clues if you choose to read around, listen to those who practice innovation, or even take it upon yourself to tinker with the 3D printer.

A systemic approach is key if innovation is to feature as a less peripheral, more core concern. Here are some thought starters:

1. Innovation structure. A lot is said about innovation culture. The worst of which decrees that innovation cultures can be created. This is a fallacy. A culture of innovation is unlikely to lead to real breakthrough innovation (though it may well be an outcome for organisations with a strong innovation practice). The reality is that structure is far more important. Radical innovation requires a framework and sheer focus. A team, resources, a way of working distinct from standard operational practices. This could be a lab, a studio or a skunkworks. Ideally it’s a significant part of an organisation carved out and given space in which to operate on its own terms. Safi Bahcall discusses this in his innovation thesis, ‘Loonshots’. He says the key requirement for innovation to take place effectively is “phase separation” in which the core business and the innovation business live in different realms and represent products/services in different phases of life. This helps insulate fragile ideas from being shot down too early.
2. Innovation authority. In most large organisations, especially those with histories stretching back to the 20th century, authority is centralised. Senior executives, who tend to come from similar backgrounds with similar experiences and qualifications, lead from the top and call the shots. This is fairly commonplace and it may even be familiar to you. Unfortunately it’s a recipe for myopic decision-making and a death knell for innovation. Divergent thinking rarely comes from the top of an organisation where leadership is usually homogenous and occupied more with conservative management than bold future thinking. Divergent thinking comes from the ‘edges’, as posited by Aaron Dignan in his book, ‘Brave New Work’. And the seeds of breakthroughs emerge where people at the edges are empowered with autonomy. A frontline worker sees something that could be better. They run an experiment to see if they can fix it. It reveals a hidden benefit. New thinking emerges that can be funneled back to a dedication innovation team. This doesn’t happen where employees have to run every new idea past layers of middle management. Delegating autonomy is a big shift for most organisations but it’s an important and necessary action if innovative mindsets are to be encouraged and nurtured in organisational life.
3. Innovation conditions. Any organisation that struggles with operational fundamentals has no hope with innovation. Poor or outmoded ways of operating your core business will almost certainly hold you back from being an effective innovator — which is about moving quickly, experimenting freely and executing decisively. The conditions in which we want innovation to happen have to be optimal. Do you have a clear purpose and strategy in which innovation can find its focus? Do you have the right blend of diverse talent? Is there commitment to the cause? Is there a solid baseline of creativity from which to springboard? These kinds of questions are important to answer (in the affirmative). Everyhow has built an organisational fitness checklist than may come in handy here: check out our free-to-use ‘O/S Scorecard’ template on the Miroverse. When your organisational fitness is good, there’s a solid chance you’ll be ready to be good at innovation.

The even bigger picture

To wrap this up there is one more point to make about the importance of innovation today. It’s that innovation is essential not just for organisational success but for progress in the world. Ever since the scientific revolution, the western world has used radical creative thinking to foster breakthrough after breakthrough. There are more wicked challenges for humankind that demand breakthrough thinking: climate change; cancer; pandemics; poverty; inequality; artificial intelligence. To make progress on these demands innovation across organisations, markets and sectors. In this sense innovation is a societal issue and imperative. If it isn’t treated as such, a chasm will emerge in which society’s progress will badly lag the gains made by new technologies and their private enterprise owners.

Innovation. It’s a responsibility for every organisation in every sector. To further themselves, upskill their employees and play a part in the progress of society at large.