David Cowland: Straight in with a controversial title! But read on before you think we’ve lost the plot. What does ‘Innovation’ really mean? Some of the following for sure:
Cris Beswick: The words Innovation and innovative now part of daily business vernacular, subtly different and yes, one a noun and one an adjective. But, do you want to be saying you are an ‘Innovative company’ or is it more that you want to be known as an ‘innovative company’?
David Cowland: Organisations that merely describe themselves as ‘innovative’ on the whole, merely perpetuate the continuation of innovation theatre so if you want to become an innovation leader, leave that to everyone else. As a company you want descriptions that describe the great product set you provide or the amazing experience you deliver for your clients or how you use the latest technological advances to create true competitive advantage, or how you encourage your employees to take more risk in order to facilitate and enable the design of the business outcomes you need. You notice how a lot of people describe Tesla as an innovative company?
Cris Beswick: Forbes rates Tesla as No.2 in their 2017 World’s Top Innovators list; describing the 100 most dynamic companies as ‘delivering breakthrough ideas and turbocharged returns’. Interestingly, Salesforce has finally overtaken Tesla to retake the top spot, a title it held from 2011 to 2015. Also of interest is that the top 10 on the list aren’t made up of the usual suspects. Apart from the top four; Salesforce, Tesla, Amazon and Netflix, I wonder how many have heard of the other 6 companies on the list? Shanghai Raas Blood Products Co Ltd, Incyte Corp, Hindustan Unilever Ltd, Asian Paints Ltd, Naver and Regeneron Pharmaceuticals?
For the complete list, visit www.forbes.com/innovative-companies.
The key question becomes; do you want to innovate or do you want to be innovative? For incumbent companies, the first often comes out of a desire to either differentiate current offerings that are under pressure or because a number of start-ups in your industry are innovating in your space. It is typically driven by the short-term driver to improve competitiveness or to retain profitability. The second is all about driving long-term change and as much about the behaviours required for a culture of innovation as it is about developing innovative products, services or experiences.
“Innovative is a label that should only be bestowed upon us by our customers.”
David Cowland: Most companies are driven to do ‘things’. The CEO asks ‘what ‘things’ have we delivered?’ As a technology team you can list out all the projects delivered, as a front office revenue generator, all the revenue you have brought in and as a product team, all the new products you have come up with for your clients. Being innovative isn’t a ‘thing’ to be delivered. It’s an ‘outcome’ driven more by an organisations culture and that means a focus on embedding the capabilities innovation requires into the core DNA of the company.
However, most of us have a tendency to categorise our world as I think it makes us feel safer and more comfortable and so the rank or titles of Chief Innovation Office comes into play with all the associated lower ranks – Innovation Lead, Senior Innovation Manager et al. But, as in martial arts if you know anything about how rankings and grading’s work, the rank/grade/belt is only a by-product of the ultimate goal that is being looked for; to be titled an innovative company by industry or more importantly, as an innovative company by your clients (and prospective clients).
It is similar to all the hype around ‘Agile’, again a noun, rather than the outcome that you are looking to achieve, which is greater agility, an adjective. Everyone is keen to say that their process is now agile and it is justified because we are simply using the right words. Take a technology function that does its development in ‘sprints’. Now you are an agile technology team because of those sprints. 15 x 2 week long sprints (without anything going into production) makes you agile, right?! Well, of course not, but not simply because you should be looking for a delivery at the end of each sprint cycle so that you can demonstrate your agility and ability to get deliveries to market fast and learn from real world feedback, but because the underlying culture is wrong. It is less about the mechanics of Agile or Innovation and more about the outcome that you want to achieve.
Cris Beswick: Going back to ‘things’, there is always a risk that after 18-24 months of running an ‘innovation initiative’, or even sooner, the CEO asks THAT question. ‘What have we delivered?’ There is an inherent risk that subordinates rush to demonstrate the ‘things’ that were delivered. The problem is that now the CEO wants more things and what started as an initiative to deliver a culture of innovation has moved to the product delivery pipeline. Maybe not a bad thing in the short term, but not what you set out to achieve. And not the fault of most CEOs as the unenlightened ones will always be searching for short term deliveries.
David Cowland: A while back, I was introduced to the following article by one of my team (Constantin von Stegmann, one of my technology graduates) http://www.bbc.co.uk/sport/rugby-union/27536258. This quote really hit home hard:
“The core principle at Saracens is that we gather talented people together, treat them unbelievably well and in return they try unbelievably hard. That is it. Everything else – winning or losing matches, winning or losing Cups – are just outcomes. They are not the primary aim.”
For Saracens, the outcomes began to arrive, so the owner was happy and they currently sit 2nd in the ‘Aviva Premiership’ (January 2018).
Cris Beswick: Outcomes based! Take Innovation labs, sometimes the epitome of ‘innovation theatre’. The 2016 Cap Gemini report found that while innovation labs were opening at a rate of 10 per week, it suggested that 90% are failing due to the challenges of making them work. This is similar to the way Accelerators and incubators are being seen. These initiatives need to pivot so that they are working to solve real world problems rather than building solutions that then go looking for problems.
One of the challenges is that ‘theatre’ is more often than not a by-product of a lack of real strategy and clarity be CEOs and senior teams about exactly how to drive innovation as a strategic differentiator and growth creator. A few examples from all the global reports on innovation seem to back this up.
“65% of executives say that ensuring innovation is part of the overall enterprise strategy is important in order to make innovation accountable, yet 80% cite innovation ambiguity as one of the top barriers to innovation.”
“73% of executives say it’s culture that makes innovation happen, yet 47% of boards say there is only partial or little agreement on culture.”
“79% of executives say commitment to innovation is very high or growing but 48% of UK employees don’t believe that innovation is embedded within the leadership team.”
David Cowland: This ties in nicely with my profile where I say that it is people that do the ‘stuff’ that gets labelled innovative. If we are doing our hiring properly, then we have good people with the right experience, knowledge and skill set. The ‘secret sauce’ (latest buzz phrase I’ve been hearing) is getting those individuals to work together as a team so that you get more than the sum of the parts.
Bringing this back to the central theme, then, it is about creating a ‘Culture of Innovation’ so that your people create outcomes for your clients in a way that your company becomes regarded as being ‘innovative’. To achieve this, a company needs to have a clear ‘innovation strategy’ that is focused around the core business drivers and vision, the ability to embed that innovation culture into the DNA of the company while being open to external influences and collaboration efforts when driving change.
Innovation theatre this is most certainly not and the organisations that genuinely move the development of innovation capability and culture to the top of the strategic agenda will be the ones who shape our future.