So here’s the next in the ’10 Mistakes you don’t want to make’ series.
The subject of this briefing is something that we should all be doing – no matter what size our business is – and that’s innovating. The main message here is that innovation doesn’t have to be complex – it can be surprisingly straightforward – if you avoid the common pitfalls that I outline here.
Here are the 10 mistakes to avoid and they work as an inter-linked set – so we have to avoid all of them to stand a chance of successfully innovating!
Mistake 1: Thinking innovation isn’t for your business.
One of the lesser-known ‘secrets of management’ is the concept that organisations, like people, follow a life-cycle. The life-cycle has the same stages that we, as human beings, have being birth (in organisational terms the development and implementation of a brilliant new idea); growth (where the idea really takes off); maturity (where we get more concerned with co-ordination and control rather than developing new ideas); decline (the focus is upon internal issues as opposed to exploring a changing outside world) and finally death.
But it doesn’t have to be that way.
If organisations keep looking outwards, question established assumptions and innovating then a premature corporate death can be avoided. So innovation, in its varying types and scope, is something for every organisation that doesn’t want to face an early death.
It just helps the organisation to keep in touch with the outside world. I can think of no exceptions.
Mistake 2: Innovation is all about new to the world ideas.
No, it isn’t just about new to the world ideas. This is a common misconception that causes many problems. Understanding and communicating the scope of innovation that your organisation needs is really important and is frequently over-looked. In terms of innovation scope, there are three areas that must be considered:
The first is incremental innovation. This is really all about changes, improvements to what we already do.
Secondly, we have new to the organisation innovation. These are innovations that focus on, to put it very loosely, ‘things’ we have not done before but other organisations are doing. So these innovations are new for us, but others are already out there implementing these innovations. I call these innovations ‘new to the organisation’ innovations.
Finally, we have ‘transformational innovation’. This is innovation activity that no one else is engaging in and has the capacity to totally transform the way our markets could work in the future.
But there’s another reason why we have to think about innovation in terms of scope – it’s critical to ensure that our future innovation effort is correctly balanced. We need a carefully crafted balance of effort across the three divisions of innovation scope introduced here if we are to safeguard future profit streams. Research tells us that the balance of innovation investment, in terms of innovation scope, varies by sector. You can find more information here. So your business plan needs to define the balance of expected innovations in terms of scope over incremental, new to the organisation and transformational innovation activity.
Mistake 3: Innovation is dangerous.
Yes it is if you don’t control it. Contrary to popular views, you do need innovation controls and not all innovation activity helps the organisation. Innovation activity isn’t an uncontrolled free-for-all. Indeed some activities could destroy the organisation (for more on this do see the reference at the end of this article). One critical control is the clear definition of the ‘Red Zone’ or activities and areas that are just too risky for the organisation to get involved with.
So don’t start an innovation initiative unless you have defined the ‘Red Zone’ and you have thought about the controls you need.
Mistake 4: It’s all about big projects and success.
It’s not. If you look at many innovative operations and especially those organisations that have successfully avoided a premature death, you will find that they focus on a range of small projects. Google for example has around 300 projects on the go at any one point in time. Above all, these are learning projects that help inform future strategy-making – even when they fail. Don’t rely on one make or break project!
Also, it’s important to have a culture that can learn from failure. In my experience, failure is a great source of learning that frequently spawns the really successful ideas!
Mistake 5: Innovation is all about products and processes.
This is something that I hear all the time. Focusing on just product and process innovation is dangerous and it is a way of thinking about innovation that reflects very much a 1980s world. Start thinking more broadly about innovation types.
There are at least six innovation types that you should be considering – yes products and processes – but don’t forget market innovation, distribution innovation, customer experience innovation and, most importantly of all, leadership innovation – which is all about how we can change and improve as leaders. There’s a strong argument too that customer experience innovation could be tomorrow’s real source of competitive advantage in many sectors. Also, if you’re starting to think about crafting an innovation initiative or project – don’t start with product or process innovation – think about starting with leadership and customer experience innovation.
Mistake 6: Running the organisation as a process factory.
Two important catalysts for innovation are time and working outside the silo. If the organisation is run as a process factory where the same people work together day-in and day-out doing the same things with little time for thought – then you’re not going to get innovation. One of the most powerful things leaders can do is to allow time for employees to break out of day-to-day activities and work on problem solving in cross-functional teams – people they haven’t worked with before but who together are responsible for delivering value to customers.
Allow people to break out from day-to-day functional working relationships into cross-functional teamwork and you could be really surprised with the results!
Mistake 7: Not rolling your sleeves up.
In the research that I conducted into innovation and turnaround management I found that the style of leaders and what they do is really important. Broadly, successful leaders understood what they had to do and got involved visibly but didn’t overly interfere. Many of the best leaders I have worked with rolled their sleeves up, got involved and personally sponsored many critical innovation learning and training projects.
A recent article – Blue Ocean Leadership – gives a good view of how innovative leaders, at different levels, work and how their approach is different from traditional management activities.
Mistake 8: Not having an innovation story that links to your strategy and vision.
This is very much linked to my last article on strategy. You have to start the innovation drive with a compelling story that:
- Clearly explains why innovation is so important to the future success of the organisation
- Explains how the effort will deliver value to all stakeholders – including staff
- Introduces the types and scope of innovation the organisation needs
- Explains how staff will be involved and
- Defines what the ‘Red Zones’ are.
Mistake 9: Not being there for the long-term.
There isn’t another way. Don’t get distracted. Whatever happens – even the next recession – innovation is still the way to avoid that early corporate death!
Mistake 10: Not celebrating the small stuff.
There’s no greater motivator than recognising success and effort. So try to keep it small and celebrate both successes and also those failures where there’s been a lot of effort but also meaningful learning! Keep the bigger projects for when both the learning from the initial innovation work and the newly-developed innovation skills have been embedded into the organisation.
And finally …
And finally, the latest research* reinforces what we have been saying here. This research tells us that many corporate innovation efforts fail as:
(i) there is no understanding what innovation activity is actually required;
(ii) the roles of managers are misunderstood;
(iii) there is ineffective use of controls (yes innovation needs to be controlled – it’s not a free for all – not all innovation activity is helpful and some activities are dangerous – for example not defining and sticking to the ‘Red Zones’ we talked about above); and
(iv) not training and helping employees involved in the innovation process.
* Kurato, D., Covin, J. and Hornsby, J. (2014) Why implementing corporate innovation is so difficult. Business Horizons. 57, 647-655