A guide to everything that’s wrong with innovation right now…

and how you can fix it.

Iain Montgomery
Mar 4 · 12 min read

Innovation teams are big these days, which is ironic as the word ‘innovation’ has become really rather tainted. But look around and you will hardly find a company that doesn’t have an innovation team or someone with innovation in their job title or job description. That’s not a bad thing.

Most companies are facing the reality that it’s never been easier for them to be under threat, by startups rapidly taking a bite out of their traditional market, competitors seeking adjacent opportunities, new technology or regulation rendering their business somewhat obsolete or simple the ever changing nature of people and society.

“Innovation” was deemed the solution to all their problems. Then the unintended consequences hit. The vast majority of innovation functions, regardless of how talented they might be, are currently failing.

(no, I don’t have a stat to back that up but prove me wrong).

MISTAKE #1: You asked the wrong people.

How often do you see the person tasked with being the innovation lead come from the IT team, or from startup land with no corporate experience, or having never worked outside the walls of the business in 24 years. Or worse, you hired a senior person from a consulting firm who brings half their junior with them before realizing they were built for PowerPoint, and not much else.

FIX: You should be challenging yourself on who is leading this, do they understand the problem, are they good with ambiguity, do they know enough of the business without being constrained by the old ways, are they curious about doing it differently? Should it be just one person, how would it work as a partnership or a team? Honestly, the right people should give you headaches, they’ll make your life as an executive difficult, they’ll challenge things, piss people off, and ultimately, come through for you.

MISTAKE #2: You gave them the the wrong expectations.

So often the people you’ve brought in are sold a vision that is so far away from reality that they end up becoming frustrated very quickly. The ideas they’re coming up with are so far out there, it’s hard for you to get behind them. Or worse, they aren’t pushing the boundaries and playing it too safe. “Great, you made a chat bot, welcome to 2016.”

FIX: Be honest and open with what you want, or at least where some of the boundaries or assumptions might be. The best innovators work brilliantly with constraints, it helps them know where to push, where to avoid and where sometimes they just need to break a few things. An innovator with a big hopes and dreams will become a liability when you stop them.

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How many innovation leaders feel.

MISTAKE #3: You internalized it too much.

There’s been a trend of late for innovation functions to be scaled rapidly internally. That’s a big show of commitment and makes for a good press release. But what then? You got 50, 100, 150 people and all the overhead that comes with. After a few months, suddenly many these people you hired with interesting backgrounds that were a bit of a coup to hire, start to talk or act like people with all the legacy baggage. They have reasons why they can’t do things rather than being the ones challenging what can be possible.

FIX: You’re going to need an internal team, of course. But think about how you structure, build and scale it. Do you even want to call it an ‘innovation team’, it gives the impression that it’s not for others and creates an odd culture. Likewise, to get the best work, do you actually want to push some of this outside the walls through startups, agencies or independent mavericks that come your way? How might you use some of the intrapreneurs in the organization that you’ve not paid enough attention to? How could you structure this around flash teams that you spin up and disband vs. hard wiring from day 1.

MISTAKE #4: You outsourced it too much.

The opposite applies too. I’m always amazed by those that think there’s a magic startup genie where you can just throw some money at a hackathon and it will all figure itself out. I’ve seen ‘digital’ teams where for every internal person, there five from agencies and consultancies, always on the hunt for how to extend their SOW rather than having their eyes on the needs of the organisation. Oh, and then there’s always that company that spends half the budget on an internal ideation platform where the best idea will likely be to serve more tartar sauce with the fish sticks on a Friday.

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This is the best outcome you can expect from a internal ideation platform.

FIX: As before, you do need to go outside, but you need the team that can actually then make it happen. Think where people outside can bring their best thinking, add value you can’t create internally and how you can make the people inside the tent make it real. Also question how you incentivise your outsiders, how can it be linked to your success?

MISTAKE #5: You’re addicted to ‘best practice’.

‘Best practice’ is often the worst thing you can get lost in. So often what we mean by this is actually looking over our shoulders at what other people are doing or have done before, then going and doing the same thing. Many don’t actually think about what they’re doing but it’s what Lego, Google, Delta, or Apple to so we just do that right?

While there’s always merit in checking out what’s new and trendy, so often this is just bringing all the baggage and mistake into your world. I’ve seen banks hire consultants for this, and it’s basically taking what the green bank did years ago, and didn’t really work, putting it on a blue slide to match you logo and selling it off. How many businesses opened up innovation labs at places like Rocketspace or Communitech with great fanfare, only to not design it for them, not see a return, then quietly shut it down.

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Oh hey there, let me copy that wrong answer too.

FIX: By all means, go learn from others, see what they’ve done well but don’t be afraid to dig into what hasn’t gone as planned. Think about how the problem you’re solving, the way you’re structured, the people you have and the strategy you could be looking to follow are likely very different. Don’t be afraid to chart you own path while stealing the key elements that you think will work for you. Chase the prize, not the press release.

I like how Tom Goodwin puts it in this tweet. A lack of courage can lead to a lot of stupidity.

Forget about the logo, it’s more the sentiment.

MISTAKE #6: You can’t look beyond ‘the valley’.

Google, Apple, Facebook etc. have done some pretty amazing things. They’ve also acquired a lot of capability and startups, often at great cost, partly thanks to the amount of VC cash sloshing around. It is an innovative place but it’s also a bubble, it’s often not relevant to your team in Calgary, Manchester, Dusseldorf or wherever. There’s a reason it’s so heavily parodied. It’s good to see, but a retailer can much learn more from Asian commerce, a lottery can likely learn more from UK sports betting, a bank can learn more in London, Singapore, Berlin or even Africa.

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Don’t.

FIX: Your team can and should learn from elsewhere. Where have audacious things been done in different cultures, like Estonia for digital societies and government innovation, Scotland is becoming a hub for the creative industries, China for how a different attitude to technology creates alternative outcomes. Encourage your team to be curious and give them the ability to chart their own path, discover something new … going to the valley is like a trip to the zoo.

MISTAKE 7: You put in so much process that you never see the best ideas.

For the most part, the innovation process is relatively common. You go learn, you come up with ideas, you test and iterate them, prototype, figure out the commercials, operating model, pilot, scale etc. You’ve read the books, who hasn’t?

But so many teams make this an academic contest, constantly trying to re-invent the wheel, add new frameworks, the latest canvas, putting in more stage gates, metrics, meetings and as you go, all the best ideas fall to the floor. The more you do this, the more you and your team find a reason to discard the more avante garde ideas, the more you compromise and the less risks you take. You’ll have the sort of team that would have said no to the digital camera, streaming movies, online banking, Uber, smartphones etc.

FIX: By all means, have a process, you need one. But keep it simple, don’t try to reinvent the wheel. The more the team has to justify their thinking, the more scientific they have to be, then those opportunities of instinct, curiosity or just gut feel get lost. Innovation isn’t a science, don’t try make it one. If academia knew so much about innovation, they’d be doing it, not just teaching it.

MISTAKE #8: You’re measuring the wrong things.

Nick puts this best.

But really, how often do you see someone boasts about the number of hours that’s gone into something, how many post it notes have been used, how many customers were in the online survey etc. I’m guilty of some of this myself, and I’ve seen others do the same, when I have done that, I’ve probably had less confidence in my work vs. when I’ve just shown it.

FIX: Allow your team to focus on what they need to do, and measure what really matters there, not what can easily be measured to make it look like a lot of work was done or as some kind of justification to you. So the next time you see a boast about how many sticky notes were used, call them out on it and get to the point.

MISTAKE #9: Your team spends more time making documents, not things.

I swear so many innovation teams spend half their time making documents for the board rather than making the things that matter. A board or an executive team shouldn’t be placing this burden on their team. You set them up to do things differently, and then got them to behave exactly like everyone else. That’s a great return guys. 3 prototypes that they don’t have the capacity to launch, but some wonderful board papers about how the process works.

FIX: Find ways your team can easily share their progress and learning, let them reinvent the process, leave it to them to communicate in a structure that fits them. Trello boards, studios located near the exec offices or boardrooms, make time for them to immerse you in the process by taking you on the road to learn from customers etc. And when it does come time to formal updates, encourage it to be left to as little content as possible. Send them on a storytelling course, go on one yourself!

MISTAKE #10: You’re locked in to the traditional business planning cycles.

Innovation is ambiguous, the whole idea is doing something new, trying it differently, experimenting frequently and often changing course as you go. Sadly, your business planning processes run on a regular cycle. So when your team finds a big, audacious, out there idea and feels that now is the time to get behind it, invest, explore and make hay while the sun shines rather than putting it in the backlog to be discussed at the next mid-term planning review.

Your legacy business cycles means that often big ideas need to be put into an 11 page business case template that will be reviewed in 8 months time, by a bunch of people making a trade off between what they think they know today, rather than what has a collection of assumptions, with some sort of validation. Given the choice of hammering your existing product 20% harder you might be confident in a 20% greater return (often false), while you choose not to put effort behind a bigger, bolder idea that has more uncertainties, but also the potential for a much greater and more sustainable return. Nor do you often go totally crazy, and do, y’know, like both?

It’s funny how leaders love to say how they delivered to the FY2x plan, rather than how they are building a new future for the business. Delivering to quarterly or annual reporting requirements is slowly killing your business, and you know it, I know it, your employees know it and the shareholders do too.

FIX: Think about how you can help make decisions outside of the normal process, where can you help your team access budget when they need it, not when it’s time to ask for it. Innovation feeds off trends, it’s in the moment, it requires serendipity, muddling through, not a rigid structure that helps the marketing team allocate its spend over the year.

MISTAKE #11: Your people feel too comfortable or too nervous.

Innovation folks need to feel a rush to get stuff done, startup teams are hungry, is your innovation team? Likewise, so often they can feel like something is going to go wrong that will put their job at risk that drives the wrong behaviours.

How often does the person or team tasked with changing your business hold back? How often have they really wanted to tell you to ‘go forth and multiply’ because you’re holding them back, but don’t dare for the sake of job security. How often do they not push the boundaries, how often have they lacked the courage to release the riskier thing? Or how often are they not focusing on the important things because you’ve given them the ability to explore such crazy levels of foresight that just aren’t relevant. I’ve seen one specific banking innovation team blow wads of cash pontificating what banking on the moon using blockchain and AI would be like when the probably should have been thinking about something a little more realistic.

FIX: I can’t emphasize this enough, but your team needs to be confident if they can fuck something up (not by design, obvs) but if it doesn’t work out, barring some gross negligence then they need to do this with some freedom. Many innovation folks, and leaders, tend to have relatively young families so they’re thinking about security and don’t always take the risks you might associate with a startup founder (though this is kinda cliche).

Likewise, don’t let them get too comfortable. There should be some pressure to deliver, even some of the small wins, or what’s the smallest version of the big idea that you can get into market. Challenge them to consider the previously impossible things now made possible by technology, social or regulatory change. Think about how you keep them hungry, challenge them to be bringing new things to your door that can go to market. It’s a different kind of hunger to a start up but there’s ways to drive that.

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Don’t make your innovation people be like Gil

MISTAKE #12: You lust after technology more than you love the problem

This is so common, you’ve fallen into the rabbit hole of new technology and lost sight of the problems you need to solve. So many teams are trying to find a way to use blockchain or desperately call something AI that isn’t really AI. And don’t get me started with the drug that is Salesforce, they might say you can build anything with them and even if that’s true, is that smart? I could build my new house out of Lego if I wanted to, but its probably not going to my best decision.

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An accurate representation of what happens to people that throw Blockchain at everything…

FIX: This is obvious, love the problem first and the technology that now allows you to do the previous impossible things should be fit for that, not the other way around. Don’t be a hammer looking for a nail.

MISTAKE #13: You want to integrate everything.

So much money and time goes into this and for the most part, it is incredibly wasteful! Trying to plug in that new shiny thing, into your crappy legacy platform normally means a massive IT bill that’s way higher than you thought it would be, results in you compromising the big new idea to make it fit in the old world and by the time it gets to market, others have planted their flag before you.

Nobody seems to think about why it needs to be integrated, especially for the customer. It’s often a business decision because we feel it needs to be in that pretty matrix the consultancy drew up for us.

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This is what happens when you force an integration that shouldn’t happen.

FIX: Challenge yourselves to put things outside the box. How might this work more like a corporate venture than something internal? How could you get this to market faster, then once you’ve proven it works, formalize how it fits around your legacy operating model. And this extends beyond technology too, does it all need to report neatly into a legacy line of business, could it be treated differently? Stuff like this really frustrates your team, and likely drives your CFO bananas.

YOU MADE IT! Now go do innovation things.

or check out label.ventures to learn about a world of pioneers who can help show you the way.

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