We all are. At least, that’s what it says on the culture values document posted here and there and framed on the wall of the executive conference room. We have a culture of innovation at Company XYZ, so we all innovate! Hurrah!
It sounds great. Energizing! And it is, until the energy fades and nothing really changes. Here’s the difficult truth about why this happens.
If everybody owns innovation, nobody does.
What looks great about everyone owning innovation on the surface is that if we aren’t doing our part, we can have faith that dozens of others are doing the innovating for us. But there’s a problem with that, because everyone gets to think that someone else is picking up the slack. Especially the people in middle management and the front lines watching the senior team’s commitment (or not) to innovation. Especially everyone, really, that has goals and incentives that run contrary to the necessary pre-conditions for a vibrant, revenue-generating innovation culture.
Someone has to own innovation leadership.
Let’s say that’s you because you have the title. What a dream job! You’re the Chief Innovation Officer, the VP of Product, the Chief Marketing Officer, or maybe the CEO of a product innovator business. This being in charge of innovation means that you are responsible for tuning up the innovation engine of the whole business.
So you own innovation. What could possibly go wrong?
Sounds exciting! You imagine a future with hockey stick revenues from game-changing product and service innovations. You imbue a glow of creative impetus that spreads across a workforce just waiting to unleash their innovations on the marketplace. I mean, who could ask for a more plumb assignment?
Yet. Stuff doesn’t necessarily go like you hoped it would. You build methods to increase idea generation, but the firehose of ideas don’t convert into marketable products. You discover bottleneck after bottleneck in your product development cycle. Priorities change too fast to take advantage of any momentum you build. You realize that you are in a position of influence but not authority over the broader criteria for revenue-generating innovation and find many of your efforts hamstrung by other firmly entrenched priorities. Your best innovators lose faith and leave for greener pastures.
What started as optimism and excitement devolves into frustration. Success and visible progress evade you. Does any of this sound familiar? What does success even means for you, as a Chief Innovation Officer.
How do you know you’re successful leading innovation?
Measuring innovation success is a huge challenge. Some people just throw their hands up in the air and say, “I can’t measure innovation, so I’m not going to even try!” Some of you are really savvy and acknowledge that, while not perfect, there are some metrics that show whether a business has been innovating well. Things like revenue from new products, revenue on product development expense, patents filed, etc.
But these are all lagging indicators. They only point at a problem long after it’s been under way and tell you nothing about how to make it better.
You want to track leading indicators for innovation.
With leading indicators, you can improve your innovation outputs before suffering the consequences of failed innovation investments. Management science and predictive AI are converging. There are, today, data-driven methods for measuring the internal organizational pre-conditions for robust, revenue-generating innovation. If you aren’t using these methods, can you be sure your competitors aren’t? Sounds risky to wait.
What it takes to innovate.
If only it were a simple formula, we’d have worked it all out already. The truth is that game-changing innovation for your business depends on your business model and your strategy. Are you product-driven, sales-driven, or market-driven? Historically, what sorts of innovation do you already do well? What level of innovation does your business need to evolve and not die?
Invention is not enough. Tesla invented the electric power we use, but he struggled to get it out to people. You have to combine both things: invention and innovation focus, plus the company that can commercialize things and get them to people.
Levels of innovation.
The more complex the innovation, the more risk and the more time it takes. The more risk and the more time it takes, the more long-term upside for the business if it works. Here’s some levels to illustrate.
In general, the winner in your competitive landscape is the business that successfully executes the most complex innovation. For an example of how that works, look no further than Netflix (business model innovation) and Blockbuster (process innovation). Guess who won that battle?
Levels of innovation leadership.
The leader who excels in process innovation is not the same leader who excels in market innovation is not the same leader who excels in business model innovation. Hence, the leadership you need is dictated by your strategy. There’s a little more to it than that because a business model innovation strategy is likely to encompass market and product innovations. And a market and product innovation strategy is likely to encompass process innovations.
And you need the right leadership for all of it. The way to do that is through a systems approach. Systems drive behavior.
“[...] vision without systems thinking ends up painting lovely pictures of the future with no deep understanding of the forces that must be mastered to move from here to there.” ― Peter M. Senge
Lead innovation by building your innovation system.
If you want to win, it’s time to go from complaisance to change agent in your innovation strategy. It’s time to build a whole innovation system-- a culture of innovation—before your biggest competitors beat you to it. Start with these steps:
Get clear on your level of innovation strategy.
Re-think and clarify your innovation leadership.
Measure, monitor, and optimize innovation predictors.
Make it a priority. (Don’t set it and forget it).
Measuring innovation predictors that work.
Take the first step today. Gameday Decisions® shows you real-time gaps between your business activities and predictors of a high-innovation culture with proprietary, low-intrusion AI. Give us a call and see how we can help you maximize your business’ revenue-generating innovation
About the author: Alicia Parr, Director, Organizational Engineering, Gameday Decisions
Known for her abilities as an executive coach, organizational engineer, and culture builder, Alicia has been pushing boundaries in HR in small-to-medium businesses for >15 years. She is a people-geek with unrelenting curiosity about organizational development, human dynamics, and leadership performance. Both learner and practitioner, she can often be found innovating ways for leaders to transform more people energy into more business growth. Alicia received a BBA in Marketing and Masters in Mass Communication at the University of Georgia. Alicia is also a mother of a precocious boy and long-time supporter of the triangle area endurance athletics community.