Driving innovation
Among the endless buzzwords of the past, present, and future, there’s one word that’s widely used across all industries. It’s being tossed around and put into every bold, disruptive mission statement. Don’t get me wrong, it’s an important word, and it’s key to growth and development. Unfortunately, I think that it’s fallen victim to the curse of semantic satiation. What’s the word?
innovation — /ɪnəˈveɪʃ(ə)n/
What is innovation?
I’m glad you asked. Our trusted Oxford Dictionary describes it as such;
The action or process of innovating.
Descriptive. OECD has worked out a slightly more detailed definition;
Innovation is production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; renewal and enlargement of products, services, and markets; development of new methods of production; and the establishment of new management systems. It is both a product and an outcome.
We’ve all got a feeling of what innovation is. At its core, it’s something new. Whether it’s new to a firm, new to the market, new to the industry or new to the world. Innovation may be on a small scale, or it may be at a breakthrough scale. Some may also compare innovation with creativity, but I think it’s important to distinguish these two. Creativity concerns the cognitive and behavioral processes applied when attempting to generate novel ideas. Innovation concerns the processes applied when implementing new ideas. Specifically, it involves a combination of empathy/discovery of a problem/opportunity, the adoption, and promotion of these ideas, and the implementation of these ideas.
How does innovation occur?
By the core definition of innovation, anything new would count as an innovation. However, you won’t derive any value from a solution to a problem that doesn’t exist. There are certain processes you can apply to help you identify, ideate and solve problems. Take Design Thinking, which can create great designs with the right skills and the right environment. It still does have some pitfalls, though, which you can explore in this article. Regardless, innovation often occurs when someone discovers a problem or an opportunity and runs with it. It may also be a result of what Jeff Bezos calls “wandering” in his 2018 Letter to Shareholders;
“Wandering in business is not efficient … but it’s also not random. It’s guided — by hunch, gut, intuition, curiosity, and powered by a deep conviction that the prize for customers is big enough that it’s worth being a little messy and tangential to find our way there. Wandering is an essential counter-balance to efficiency. You need to employ both.”
Keep in mind, no one asked for the Echo or AWS. I could say “it’s Jeff Bezos so it must be true” but I think that there should be a balance applied to most of what you do. Once you know where you’re going — be efficient. Define a plan and execute, but create room for wandering. The outsized, “non-linear” outcomes, as Bezos describes them, are highly likely to require wandering.
How do I drive innovation?
Some key points need to be valued to drive innovation in your company, starting with the most important one;
Culture
I cannot stress enough how important it is to create a “culture of builders” — people who are curious, who want to explore and like to invent. Even when they’re seniors and experts in their field, they still have a “fresh” beginner’s mind. They see the way things are done as “how we do things, now”. This mentality is detrimental to approaching big, hard-to-solve opportunities. It’s a mentality with a humble conviction that success can come through iteration, and that the path to success is anything but straight. Make sure you define a goal or some goals that can be impacted by every employee, in every department. Give repeated reports on your progress and celebrate the impact being made. Focus on attracting, hiring and retaining versatile and talented employees that can think like owners. Make sure that you invest in your employees in all areas, not just what benefits their ability to do their work today. Don’t just use analysis, but also intuition, heart, and empathy when finding your way forward.
Disrupt yourself
A pitfall of many large companies is the inability to recognize and embrace trends and development before it’s too late, or the inability to act upon them. If you’re not prepared to compete with yourself, you’re not prepared to compete with the disruptive startups coming for your market share. Your internal culture needs to be built on the fact that if you’re here to stay, you will need to embrace change. Amazon calls this the “Day 1 philosophy”;
“The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind” — Jeff Bezos
“Day 2” companies do make good decisions, but the problem is that they make them slow. A big part of this is that more often than not, everyone has to agree on a decision. This leads up to the next point;
Make high-velocity decisions
First, never use a one-size-fits-all decision-making process. Most decisions are reversible, so-called “two-way doors”. A decision can be made, and if it turns out to be a bad call, so what if you were wrong? You can just go back. These decisions can use a light-weight process.
Second, most decisions should probably be made with around 70% of the information you wish you had. If you wait for 90%, chances are you’re being slow. Besides, you need to be good at quickly recognizing and correcting bad decisions. If you’re good at course correcting, being wrong is less costly than you think, whereas being slow is guaranteed to be expensive.
Third, Continuing on the streak of Amazon references, a part of the “Day 1” process has a “disagree and commit” system for employees. The idea is that not everyone will agree on a decision, but it’s still possible for people who disagree to work toward the same goal. Just imagine how slow the decision cycle would be if you would have to convince someone instead of simply getting their commitment straight away. Disagreeing and committing is not thinking “well, these guys are wrong and missing the point, but this isn’t worth me chasing”, but a disagreement of opinion, an expression of a view and a chance for the rest to weigh this view. This should result in a quick, sincere commitment to either go ahead or cancel.
Last, do not underplay misalignment issues. Teams and divisions can sometimes have different objectives and fundamentally different views, meaning they are not aligned. No discussion and no number of meetings will resolve this deep misalignment. If the issue is not escalated, the default resolution is exhaustion. Whoever has more stamina carries the decision. This slow, toxic friction is guaranteed to de-energize a lot of people. Escalate these issues quickly, and get it over with.
Scale your failures
Failure is not a failed investment. There’s always an ROI in the form of valuable experience. If the case is that nothing comes out of failure; you’re taking the wrong risks. Your experiments should be good bets, but not all good bets will ultimately work out. Though ultimately, a single big winning bet can more than cover the cost of many lost ones.
As your company grows, everything needs to scale; including the size of your failed experiments. If they’re not growing, you’re not inventing at a scale that can make a difference. You need the ability to take financial risks when necessary. The size of your experiments and, inevitably, your failures, reflects your ability to innovate.
Stop thinking about it
Action is the single most important driver of innovation. No matter what position you are in to make an impact in your organization. If you’re not taking action, you most definitely will not innovate. Though, make sure that you work with people and not against them. By setting the bar for initiative and creative thinking, you do not only promote your ideas and ambitions; you might as well inspire others around you.
Again, innovation does not just “occur”. It’s often not the result of a carefully planned process, but it’s also not random. Innovation comes from people, and it’s more often than not fueled by intuition, guts, curiosity, and conviction. All of which cannot be bought, and cannot be manufactured; it comes from the people working above, below and beside you. While it’s important to get a hold of the brightest minds, innovation does not necessarily come from a grade sheet or any amount of certifications either.
Final words
This piece is intentionally shallow. As with a lot of other things, there is only so much general advice that can be helpful; there are no shortcuts, and you wouldn’t want to cut corners when positioning yourself for increased innovation. Each organization is often in its unique state and the path to success is anything but straight. However, do not let this be an excuse. Find the balance of efficiency and wandering that fits you and the dynamics of your organization. Be self-aware and be consequent when creating your builder-culture. Find what enables the people around you, shift your focus, and run with it.
The word “innovation” was written 15 times in this article.
