Corporate innovation's unexpected ingredients
I love pressure cookers. They are easy to use and ultra-fast. The pressure speeds up the preparation process, but the neatest thing is that there is NO loss in quality. On the contrary, the food is fresher and tastes better. Just like that, many innovation initiatives are accelerated in a pressure-induced manner: time and social pressure being the most popular ones.
"Social pressure is the most overseen reason why flat organizations are so great at innovating"
Many innovation sprints have an element of time pressure to them. Obviously, I’m not talking here about constant pressure, seeing that this would drive employees insane. But I do mean well-defined and short-term deadlines that come with innovation projects. It’s what, for instance, MasterCard’s Garry Lyons uses in his ‘Innovation Express’ programs which are created to move very quickly from problem to solution. “Teams have just 48 hours to come up with an innovative but credible solution to the challenge and turn their best idea into a prototype product complete with business plan, video demonstration and go-to-market plan which they have to pitch to a select group.” What’s absolutely essential, with this type of competition though, is that you keep it fun. If the pressure feels imposed, your innovation labs – or whatever you want to call them – will go sour. There is a thin line between positive pressure and the negative kind, which is detrimental to the creativity and well-being of your workforce.
Social pressure is another type. It’s one of the most overseen reasons why meritocracies and flat organizations are so successful at keeping up with their markets and innovating. True, the employees are empowered. They do not have to ask anyone’s permission. They are free to create, experiment and try out their own ideas on a continuous basis. But the coin has two sides. Just like their decisions are their own, so are the results. If they fail, it’s on them. There’s no hiding behind the marketing manager or the CEO. So they continually have to strive to become a better version of themselves. This can be liberating, energizing and inspiring. But it’s still (a positive kind of) pressure.
Radical Innovation is a peninsula
Many radical innovation experiments like of those of MasterCard’s or the International Airlines Group have another thing in common, though: the element of distance, or isolation even. I know that many of you will frown upon this concept. We have all learned that separation and silo-creating is wrong. If you separate your people in unrelated departments, you’re in danger of atrophying. And yes, if you disconnect your company from your customer and your environment, you’ll lose touch with the market, wither and die. The method of isolation is indeed a delicate one.
"The talent & processes needed to manage existing and emerging business tend to be so different that they constantly clash"
But applied right, it can do wonders. Because your board and your Management are only human. Radical changes tend to scare them. A lot. It’s only natural: if a group of internal innovators comes up with a platform-based business model that might cannibalize their beloved core business, a lot of sweat marks will be created on managerial shirts. You cannot blame them. Humans are risk-averse in nature, a characteristic which tends to become more prominent the ‘higher’ you climb. Because you have much more to lose. It’s psychology 101.
But that does not mean that we should give in to it. One of the most common solutions to empower and accelerate your innovation core, is to remove it structurally, geographically and decision-wise from board and Management. The existing and emerging business are separated from one another, because the talent and the processes needed to manage both are so different that they constantly clash. This allows the more radical division to really experiment. They are empowered to try things out and test them to see how they would work, without some really stressed-out people breathing down their necks. Isolation is merely protection in this case. But, just like with the pressure part, keeping a good balance is difficult. If you isolate your innovation too much, it won’t work. Just think of the beautiful accident that Xerox PARC was.
Radical innovation feeds on speed. If it does not happen fast enough, it loses its value and becomes incremental again, at best. Now, what’s the one thing in our environment that keeps accelerating our industries and the level of competition? Customers, right? They are one of the fastest nodes in our networks. So it only makes sense to latch onto them and let them speed our companies up. No wonder that some of the most successful companies out there use co-creation with customers as a way to quicken their innovation efforts and make them more radical. Vodaphone, MasterCard, DHL and many others use connected ideation to keep up with their markets. I love Peter Hinssen’s example of how MasterCard collaborated with Maytag to invent Clothespin, a contactless payment app which makes it so much easier now to pay in laundromats. Co-creation is the most natural form of evolution for a company.
So yes, there is no one-size-fits-all approach when it comes to innovation. And it is a real challenge to keep the right balance when you apply 1 or more of these three building blocks. But I do believe that pressurization, isolation and co-creation have definitely proven their value in some of the more radical innovation projects out there.
This article first appeared in a shortened version in the Dutch publication Trends.