Setting up organizations that nurture innovation
Fostering innovation is an elusive pursuit. This post details out the key activities to intentionally nurture innovation within organizations.
Organizations struggle with innovation. It could be at a certain life stage (mature products for example) or when moving past a certain scale (growing the next million customers for example). There is so much research on what drives innovation, but it remains elusive because innovation is an outcome that is difficult to plan for. It is usually a waiting game and an idea rarely emerges at a certain time.
But the risk is that for some organizations, this moment may never arrive. Remember organizations like Polaroid, where it never arrived? Or Yahoo and Nokia where their pivot was late? Or Netflix, where the pivot from offline to online was perfectly crafted. The difference primarily lies in their ability to fail fast & capitalize on ideas early on and this ability is deep rooted in their culture.
Take 3M’s Post-It-Notes for example. The innovation was never centered around notes. A scientist researching adhesives discovered a peculiar adhesive that stuck lightly to surfaces, while the goal he was working towards was different. He wanted to create adhesives that are extremely strong for industrial use. After years of trying to find a usage for the light adhesive, one of the team members used it for sticking paper on a book as a bookmark. Over forty years, the adhesive helped the company develop a mainstream collaboration product that now has digital applications, including associated apps.
Ideas could come from any part of your organization and at any time. Your ability to translate these ideas into action is enabled by a consciously crafted culture.
Kurt Lewin used a heuristic equation that pretty much summed up driving any kind of behaviour:
B = f (P,E)
Behaviour (B) is a function of a person (P) in an environment (E). The strongest lever to any behavioural change is E (Environment). There are multiple experiments that have reinforced that a small change in the environment lead to significant shifts in behaviour. For example, stocking products at a certain height or position influences purchase behaviour.
If we want to mould behaviour that accelerates innovation, the strongest lever is E (Environment). The core design of your culture of innovation should focus on this very simple rule – It should not be difficult to innovate. Human drive is wired to default to the path of least resistance. Your role as the architect to enabling innovation is to carefully scrape away barriers in the environment and piece together certain accelerators.
Practical To-do
Use “follow the decision” technique (read this post for an overview) on ideas. Identify two ideas that were successful and two that failed in your organization. Map their point of origin, number of reviewers to the idea, who sponsored it, how it kickstarted and where it succeeded or failed. Here’s a idea journey I put together for an idea I worked on.
An Idea Journey
When I charted out an idea that one of my teams have been working on, I realised the effort that get increasingly added when you had to pass through “Gatekeepers” as an idea owner. The effort does not produce any outcomes to the idea. I could quickly recall a few ideas that we had worked on for over 2 years.
Controlling E (The Environment)
Architecting the environment would mean that you craft these two dimensions – Barriers & Accelerators.
There are three primary barriers that increase the effort required to innovate:
Barriers to Sponsorship
Truly nascent ideas are very fragile. The chances of an idea seeing light is inversely proportional to the number of people “reviewing” it. Feedback on ideas should be “feedforward” and focus on inputs that make the idea work. Typically, sponsors/investors, who have the decision making power to say “go” for an idea, are the ones who should review ideas. The point of frustration normally is a series of “gatekeepers” to reaching the actual sponsor. If you have to have more than two reviews before a sponsor reviews an idea, it is a strong indicator to high barriers to sponsorship. The answer to solving this is in the organization’s structure and the decision tax it generates. Read more on decision tax and ways of mitigating them in this article.
Practical To-do
Once you chart an idea journey, try and understand why these idea owners reached out to certain additional leaders for reviews. Are they additional gatekeepers? Or do they actively add value to the idea? How do you ensure that you create access to sponsors at scale? How do you bring down the gating period?
Barriers to Information
Do you think that game changing innovation usually comes from functions/individuals that have closest interactions to the customer? No. It actually is a misconception. This appears to be the case because information is not democratized and customer information is held within a few. It also means that your data system design needs improvement and your capability to innovate primarily resides on tribal knowledge. To scrape away this barrier, you need to invest on systems and teams which manage this information. These investments should focus on generating insights and democratizing it, so that it is accessible to everyone. Read more on information tax and ways of mitigating them in this article.
Practical To-do
Identify 5 individuals from different teams and functions. Interview them for their perspective on “what are features that your customers use most of the time” and “what are the pain-points when using them”. If you get a variety of unconnected answers or if you don’t get an answer at all, then it is a strong indicator to high information barrier.
Intensity Dial-up
Intensity dial up occurs when the organization works on a fast paced environment and decision making over indexes on speed, quantum of delivery. The fallout is that it eats up into your space to innovate. Dialled up intensity leads to a very low priority to work on ideas and high priority to quantum of delivery. The path to resistance for innovating significantly goes up and it starts to feel like a huge effort to work on an idea. People start to see that the effort required to disengage themselves from their daily work is very high and that the environment does not incentivize their behavior. Read more on dialed up intensity and ways to mitigate them in this article.
Practical To-do
If you have employee surveys, dialed up intensity could be recognized by low job satisfaction scores. Watch for phrases like “business-as-usual” (one of the most misused terms on earth), “daily deliverables”, “busy”. The moment your team starts distinguishing between innovative work and “business as usual” work, you can be sure that there is dialed up intensity and that your environment is not conducive.
Accelerators
In addition to scrapping away barriers, you need an ideation process that is well known to everyone. You need distinct systems that accelerate three dimensions of the ideation process – Surfacing, Building and Investing on ideas.
Surfacing
Ideas could start anywhere and you need scalable ways of interacting with ideas early on. A few organizations have a structured system and an intake process for ideas. It’s important that at an early stage, the environment is free from judgement and does not encounter disagreements. It is necessary that your system has an idea backlog where these ideas are hashed.
Building
There’s an element of coaching needed for every idea. At the build phase, you need experts to weigh in on the idea and help shape it. The system needs to be able to connect idea owners with coaches/experts and offer a structured development journey.
Investing
All ideas can’t win. You need to carve out strategic priorities and communicate them. You also need to establish a system of prioritizing your investments. Sponsorship/Investors cannot be at a far distance and if they are, then you need to empower your organization to make these investment decisions.
Practical To-do
A good idea to translate this system into a working program would be having “Innovation Stewards”. They are workgroups that build the process and systems for these three dimensions. A conversation starter to establishing leadership focus on this is to provide a health assessment of these processes and build an inventory of ideas that failed.
Am experimenting a series of things that define these three accelerators and it appears to be gathering steam. In the process, a structured journey for ideas with tools and templates was created to identify customers, define the customer experience, prototyping iteratively, resource planning and garner support/investment.
Are you doing something interesting in this space? What are processes you have for surfacing, building and investing in ideas? Let me know!