Innovation Playbook - Why Is Innovation So Hard?

Innovation is being used by business leaders as a miracle cure, allowing companies to stay competitive in fast changing markets. The word is now commonly used in ads, annual reports and corporate mission statement. For all of the talk about the importance of innovation, innovation management and strategic innovation are hardly generally understood. Forward-looking executives are all looking at confronting the challenge of innovation when decades or management practices and system were designed to improve efficiency and building scale and scope as well as maintainng control. Innovation management was relatively not part of most B-school curriculum and there were few management tools and frameworks out there to help managers to do this job.

Innovation management is the economic implementation and exploitation of new ideas and discoveries, and the implementation of an innovation culture in an organization, to promote and make possible the development of new ideas and business opportunities. It consists of innovation strategy, culture, idea management and commercialization risk management. The last one is least understood and most people just simply associate innovation with creative ideas. Now against the backdrop of the continuous disruption bring about by digital technologies, the rise of the knowledge worker and the creative class, accelerating globalization, and the declining predictability of business in general, only new approaches to management of talent will provide companies with a sustainable competitive advantage. Emerging technology, globalization and social computing were creating new opportunities that didn’t exist before.

This is no question it will be painful for companies contemplate to put away decades of management orthodoxy; they will have to balance revolutionary thinking with rapid experimentation to feel their way to new management models. Time is the essence. For more than 20 years I’ve been trying to help clients to innovate. Although the definition of innovation was very different when I started and the focus was primarily towards new technology or manufacturing process. It was sort of R&D and my mission was to figure out how to commercialize them.

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Today, innovation takes on a whole new meaning. Looking back at the history of management for the last 50 years you’ll quickly realize that “management” was designed to solve a very specific problem from today—how to perform certain things in a repetitive fashion and controlled manager as they increase the scale both locally and internationally. It is about building a giant ship with is bigger and more efficient than others. It also carries a lot of sailors and passengers and everyone need to be on board and stay there throughout the journey.

Here are our big challenges: How do you build organizations that are agile and as nimble as change itself? How do you mobilize the imagination of every employee, partners and customers? How do you create a new reward system that encourage smart and calculated risk taking? How can get these done when we have to report performance as a public company on a quarterly basis?

Three CMOs asked me over the last four weeks why my company is focused on digital innovation and not innovation in general. My answer was that digital technologies and connectivity is making it possible to amplify and aggregate human imaginations and capabilities in ways never before possible. But most CEOs don’t yet understand how dramatically these developments will change the way companies compete, organize, and manage resources. In another words, - Web 2.0 will change the way we are organized and how decisions are made – Management 2.0.

Comments

[Prof Peter Streadman]

This is a very insightful piece on the state of management today and it is what all top business school are concerned. You have a sharp way to get to the heart of the problem. Looking forward to read more on this topic. FYI I teache strategic managment in year two MBA.

[Greg Krauska]

Idris, I see the same challenge among sales and marketing teams. For many sales leaders, innovation is a good thing if a) it drives current fiscal year revenue b) it blocks competition or c) doing client-requested innovation will ensure a future relationship.

Those are not necessarily bad things. However, making innovation part of a company culture will require a different view of how value is created (and for whom), success measures and understanding exactly who is the customer.

[André Galhardo]

Why is innovation so hard?

Well... "If it was easy, everybody would be doing it", right? :)

Managers need creative coaches to open their cartesian minds.

And so creative people need them to implement and turn ideas into revolutions.

(Of course managers can be creative and vice-versa. But few can be great at both functions.)

A small conclusion: we have to trust more on each other.

Let's see Innovation as an excitement, not a risk, as John Hegarty says.

Great presentation, Idris. Looking forward to read part 2.

[Jackons Donaldson]

Idris Great presentation. Innovation is a hot topic and we are just learning how to deal with it. Looking forward to part two.

[Bart]

"A small conclusion: we have to trust more on each other.

Let's see Innovation as an excitement, not a risk, as John Hegarty says."

Maybe companies should start seeing innovation as a way to maximize (and retain) their employees' qualities?

This could lead to a different and interesting new role of Human Resources (which basically is a kind of internal marketing dept).

[Flavio Azevedo]

Perfect presentation, Idris. And keep innovating it...for we look forward for part 2.

The major problem is meaning.

In most companies, innovation is a word.

In other companies, innovation is a department.

In few companies, innovation is a behavior.

[Joshua]

Great presentation. I in full agreement with Glavio that in mnay companies including ours, innovaiton is a word, not action. We do have an innovaiton fund of $12mm but it is used for PR.

[André Galhardo]

Sure, Bart.

Weeks ago, for the first time in my life, I spoke with Human Resourses people.

Looks like innovation is a totally new word for them. You can't find it in their corporate manuals or "physiological tests"

Maybe this is a good sign. :)

As innovation is a state of mind, how can they help companies find the best people?

[Rory MacDonald]

I think your typical innovator (depending on whether you believe in these things) is a Myers Briggs ENTP. Although I am now going to get (perhaps deservedly) roasted by the ethnology posse from a few weeks back.

Once again, sorry to be tedious but, I agree with Bart: innovation has as much of an internal role to play in HR and in making people's job more interesting and more fulfiling. It is very closely connected to the Japanese management theory which I think is called Kaizo, whereby all employees are constently encourage to refine what they do an innovate.

Idris, I particularly like your conclusion on this one. Slide 39 - ain't that jus the truth!!!

[maz iqbal]

Hello Idris

Great article. I'd like to share with you my perspective on innovation.

First and foremost if you are looking for innovation in large companies - especially publicly quoted Anglo-Saxon companies - then you are looking in the wrong place. Why? As you state in your article these organisations are designed for repeatability - repeat what has worked in the past. These organisations tend to attract professional managers who are adept at using existing management tools; these managers are rarely visionaries and rarely have the structure in place that allows them to take personal risks.

New, bold, thinking and the courage to act on this thinking through thick and thin tends to come from the underdog, the smaller player, the 'outsider': often a solitary human being with a passion for bringing life to a possibility that exists only in mind. And of course some of these individuals succeed. Here I can think of James Dyson, Steve Jobs, Howard Schultz and Richard Branson in the business world.

Once the innovator steps away from the business organisation - usually when it has become a large, unwieldy, impersonal organisation - and professional managers move in then the culture of innovation tends to die away.

To conclude it is my assertion that the seeds of innovation lie in the minds of individuals that can envisage new possibilities and then can marshall the resources needed to convert these possibilities into new realities. So if we are looking to assist innovation then perhaps we should be assisting these individuals rather then attempting the impossible: getting corporates to dance.

[Peter Nevine]

This is a great slide show. Many think innovaiton is jsut creativity or new products. Innovations is:
1/ Seeing opportunities
2/ Envisioning new worlds
3/ Managing risks
4/ Executing plans
5/ Promoting adoption
6/ Sustaining infrastructure
Thanks for sharing. This is a great blog.