The rush into innovation ‘activity’ – any activity – might not necessarily be a good thing in many organisations. Under pressure from the top, it’s easy for leaders to reach for the most expedient solution to tick the innovation box when the proposition is far more complex.
As innovation researcher, Tim Kastelle, has pointed out, it’s critical to first work out why you want to innovate, where it fits with your business model, and how that will drive future growth. Depending on your culture, your business, and your industry, the logical course of action might be to do nothing – for now.
Wasting precious dollars on ‘initiatives’ that are poorly conceived and don’t deliver results simply reinforces internal cynicism about innovation being yet another bandwagon for senior leaders to jump upon.
Innovation adviser and author, Jeffrey Phillips, says it’s often argued that innovation is expensive yet, as with any other business activity, it’s only so if it doesn’t achieve the desired outcomes.
“Innovation is very expensive when done ineffectively, without process, without tools, and by people who are frightened of both potential outcomes,” Phillips says. “They are afraid to ‘fail’ because that often has career limiting issues. They are also afraid to succeed, because really interesting and valuable ideas are often too strange for their executives to agree to.”
Global research continues to build the case for a more considered and aligned approach to innovation.
A strategy would help. As Booz & Company’s 2011 innovation survey found, nearly 20 per cent of responding companies admitted to not having a well-defined innovation strategy at all, yet huge sums were being spent on innovation activities across the survey group. And only about half of all companies said their corporate culture “robustly” supported their innovation strategy.
“The elements that make up a truly innovative company are many: a focused innovation strategy, a winning overall business strategy, deep customer insight, great talent, and the right set of capabilities to achieve successful execution,” the researchers found. “More important than any of the individual elements, however, is the role played by corporate culture in tying them all together.”
Even Procter & Gamble, long regarded as a successful example of corporate innovation, lagged in addressing key cultural issues. At the start of the 2000s only about 15 per cent of P&G’s innovations were meeting revenue and profit targets, so the company launched its Connect + Develop program to take it down the path of disruptive innovation. This initiated a raft of significant organisational changes, including the creation of a ‘growth factory’ to run alongside the day-to-day business. The result: about 50 per cent of its innovation efforts now meet profit and revenue targets. P&G’s culture today is radically different to what it was in 2000.
Depending on their situation, such an ambitious culture shift may not be for every organisation. As culture change expert Carolyn Taylor says, leaders contemplating a culture change program are justified in asking if the investment will deliver the desired results.
Leaders first need to “put a real business case together, understand the size of the business opportunity, and the level of investment (financial, personal, effort, time) that will be required to get the return,” Taylor says. “If you then make the decision that this is not the right move for you, you have made a smart business decision… Saying no is a good thing. It’s actually one of the characteristics of many great cultures. Saying yes is good too, but only if you really mean it!”