Category Archives: Middle Market

Take Away 10 and Add 6 For Innovation

 

Preparing for a monthly webinar on intrapreneurship has led me to literature searches for resources that represent thought leadership on intrapreneurship and innovation. Most of the literature recognizes the inherent dichotomy between organizations wanting to be cutting edge for the sake of competition, but not wanting the risks and change necessary to go there. Consequently, many stumble in their pursuit of innovation. The book, The Innovative CIO: How IT Leaders Can Drive Business Transformation (CA Press/Apress), addresses practical suggestions to overcome some common barriers to successful innovation. Dennis McCafferty writes that “it also demonstrates how to take advantage of your human and tech resources to effectively evaluate, track and “sell” the value of innovation within your company. The Innovation CIO coauthors Andi Mann, George Watt and Peter Matthews discuss the following 10 Ways to Kill Innovation:

 

1. Unhealthy Internal Competition  Healthy competition encourages achievement. But when employees focus more on beating each other than benefiting their organization, it’s unhealthy competition.

2. Inconsistency in Rewards  If workers feel there’s no rhyme or reason in performance awards, they’ll grow demoralized and stop trying.

3. A Culture of Intimidation  Bosses who ridicule “dumb” ideas to present themselves as “the smartest person in the room” ultimately choke innovation through fear and ridicule.

4. No Organizational Framework for Innovation  Without a companywide framework for fostering innovation, it’s difficult for lower-level managers to leverage innovation as it happens.

5. The Pursuit of Perfection  Perfectionists tend to “hide” work until they feel it’s 100% ready. But innovation thrives from collaboration and dialogue while work is in progress.

6. Protection Obsession  Company “protectors” are often guilty of shooting down any proposals that they feel will harm their organization or department.

7. Inbox Overload  A relentless barrage of emails, meetings and phone calls–many of them unnecessary–keeps CIOs and their teams preoccupied with the mundane and urgent instead of something fresh, new and valuable.

8. Voluntary Isolationism  IT teams will often “go dark” and bury themselves in projects while closing off contact with stakeholders, customers and others who can help greatly via feedback.

9. Clinging to Legacies  Outdated IT systems and processes hinder innovation. However, too many CIOs stick with them because they cost money and/or they don’t want these deployments to be perceived as “failures.”

10. No Strategic Focus  Innovation teams must always keep concrete, business-benefiting goals in mind during collaboration. Otherwise, it’s just a fun but ultimately pointless “creativity exercise.”

What is true in IT circles is true, to some extent, in any kind of business. The environment and culture have so much to do with successful innovation. Agility Innovation and Ovo Innovation, in a joint whitepaper, provided a list of 6 key capabilities needed by executives to foster the skills and capacities for innovation in their companies:

  • creating alignment,
  • deploying trusted methods and tools,
  • effective communication and engagement,
  • empowering people, providing skills,
  • refocusing attitudes, perspectives and rewards ,
  • defining a corporate “governance” for innovation

The whitepaper authors argue that  these skills or capabilities can be developed in an appropriate strategic manner when applying the Executive Innovation Workmat (shown below).  They believe that executives can be trained to both understand how to innovate and how to acquire and inspire the skills requisite to do it well. Beginning with establishing a language for innovation, complete with agreed upon definitions of key terms, a systematic approach serves organizations best. When corporate strategy and innovation have linkage, the likelihood of success goes way up!

Executive Innovation Workmat

 

 

anti-Innovation Sentiment and Intrapreneurship Collide

In order to stay current in a subject area that is constantly changing, one must be well read and, beyond that, follow the bets though leaders around. Last week, I had the opportunity to discuss intrapreneurship in person with one of my favorite innovation bloggers, Jeffrey Phillips. Tonight, I read a blog post by one of my other favorites, Gijs van Wulfen.

Gijs tackles the subject of anti-innovators in his recent post.  His writing echoes some of what Jeffrey and I discussed last week. As we  looked at different models for commercializing business ideas last week, we camped out for a while on what stultifies innovation. While many leaders acknowledge that innovation is a top priority, they would also be quick to add that implementation of innovative practices can be a challenge. The consequences, according to Phillips, include: 

 Poor execution of innovation goals
 Failure to achieve strategic goals
 Limited organizational design to sustain innovation
 The growth of disbelief or cynicism when innovation isn’t pursued.

Stubborn personvan Wulfen describes personnel as a main hindrance. He writes of employees who “are stuck in their habits.. ignorant the world is changing fast and (thinking) they have nothing to fear.” He goes on to describe the anti-innovator as a (negative) contributor to team culture:

There are often quite a few anti-innovators. Everybody knows this extravert guy or woman who is anti-everything. They have “the biggest mouth” at the lunch table in the company restaurant. Their influence on the company’s culture is often quite substantial. Don’t underestimate their impact. The herd goes as fast as the slowest animals. If the anti-innovators lean back nothing moves. So how do you get them up and running. That’s the question.

You can try to convince them. Unfortunately that often fails because they are experts in coming up with idea killers like: “We are too small for that… There is no budget… We need to do more research… We don’t have time… It’s too risky… That’s for the future. Everything is OK now.”

You can try to do it without them. But that won’t work either. You need an awful lot of colleagues and bosses to share your vision before a big change can truly take place. You need R&D engineers, production managers, IT staff, financial controllers, marketers, service people and salesmen to develop the product, produce it, get it on the market and service it. You can’t do it without them: you can’t innovate alone.

The way to get anti-innovators up and running is to respect them, to understand them, to connect with them and to let them experience change is necessary. They will only change their attitude if they get new insights themselves. So, you have to give them a chance to discover what’s happening out there. Invite them to join your innovation team and take them out on an expedition to discover how markets, customers, competitors and technology are changing.

If they, as the slowest animals of the herd, find out there’s a group of hungry lions following the herd they stop leaning backwards. They start running too as necessity is the mother of invention. They will spread the urgency to innovate among their colleagues. And that’s good news because If the slowest animals start running, your organization’s innovation power really gets up to speed.

Think about the anti-innovators in your organization. What motivates them? Do they travel in herds? How can innovators infiltrate their ranks yet respect them and build bridges for collaboration? As a mentor in an upcoming venture challenge competition, I will be working with teams that must have creatives and analysts. Often, including an anti-innovator on your launch team can bring helpful perspective. Stew on it!

 

Leadership Mindsets to Foster Innovation

When lively conversations abound on the subject of innovation, invariably, the matter of culture emerges. Does the organization have a suitable culture to nourish innovation? If not, why not? Often, management is held up as a scapegoat for the lack of innovation. Karl Ronn recently said, “Companies that think they have an innovation problem don’t have an innovation problem. They have a leadership problem.”

Scott Anthony, a regular contributor to the Harvard Business Review blog and managing partner of Innosight, took note of Ronn’s recent comment. Anthony  had featured Ronn in The Little Black Book of Innovation, and considers him to be “thoughtful, widely read, a seasoned practitioner, and a great communicator.” Anthony wrote of him in a recent HBR blog post:

Ronn’s basic idea was that four decades of academic research and two decades of conscious implementation of that work have provided robust, actionable answers to many pressing innovation questions. Practitioners have robust tools to discover opportunities to innovate, design, and execute experiments to address key strategic uncertainty; to create underlying systems to enable innovation in their organization; and to manage the tension between operating today’s business and creating tomorrow’s businesses. Large companies like IBM, Syngenta, Procter & Gamble, 3M, and Unilever show that innovation can be a repeatable discipline. Emerging upstarts like Google and Amazon.com show how innovation can be embedded into an organization’s culture from day one.

Pixar innovationIn Building a Growth Factory, David Duncan and Anthony suggested why many others have not been successful: too many companies use point solutions to address a systematic challenge. They may offer an idea challenge, ideation session, growth group, corporate venturing arm or incentives for innovation…

(writes Anthony,) “None of these is bad, but point solutions don’t solve system-level problems. Duncan and I suggest working on four systems — a growth blueprint, production systems, governance and controls, and leadership, talent, and culture. It isn’t easy to do all of that, but it is what is required to really make innovation work at scale.” (continuing:)

Ronn agrees, but notes that the responsibility for such systemic work ultimately rests with a company’s leadership team. And it’s absolutely necessary. Research by Clayton Christensen, Rita McGrath, Richard D’aveni, and Richard Foster make very clear that we are in a new era where competitive advantage is a transitory notion. (McGrath’s forthcoming book is provocatively titled The End of Competitive Advantage.) Any executive that doesn’t make innovation a strategic priority, ensure there is ample investment in it, and approach the problem strategically is committing corporate malfeasance.

Further, leaders can’t just set the context and hope that innovation happens. Innovation is enough of an unnatural act in most companies (which were built to scale yesterday’s business model, not discover tomorrow’s) that it requires the day-by-day attention of the company’s top leadership team or it simply won’t stick.

The leadership challenge facing executives today is to balance today’s needs versus tomorrow’s. In the current environment, productivity and risk management are priorities. In the longer run, being able to anticipate market needs and adjust one’s go-to-market strategy are critical. Leaders must now be good at both to create and sustain competitive advantage. 

Anthony acknowledges that, to justify why innovation is a struggle, leaders mention factors such as “short-term pressures from investors, talent deficiencies, the challenge of implementing innovation-friendly rewards structures, the still fuzzy nature of innovation, and, in candid moments, their own discomfort with the different mental frames required to lead innovation.”

Most importantly, the paradigm shift needs to occur whereby the goal moves from being most innovative among a peer group of companies to being cutting edge like some of the upstart organizations known for redefining the playing field. 

Foster Intrapreneurial Activity

Today I had the opportunity to attend an Innovation Symposium culminating a 125 year anniversary celebration at North Carolina State University. While NC State is the arch rival of my alma mater, UNC, it is a great university located in my hometown.  One of the recurring themes today as presidents of other land grant universities took their position at the  podium was how many schools have done a good job of incorporating the business community into campus life–particularly as it relates to launching novel startups with a research basis made possible by the work of faculty and students. An outgrowth of that theme was the concept that more corporate citizens needed to catch the entrepeneurial spirit and turn it into intrapreneurial initiatives.

When I did an internet search for examples of universities partnering with businesses in intrapreneurship, one of the results was a story from Louisville, Kentucky. Beth Avey, the Executive Director of the Kentucky Indiana Exchange said in a blog post on their website, “Over the years I’ve often heard people talk about how the corporate culture stymies creativity and new ideas, and how companies lose their most talented people in pursuit of more innovative opportunities. Well, in our region there are employers doing just the opposite.”

Health intrapreneurshipWhat a great idea! Companies who are tuned into the need of workers to have their ideas heard and implemented–regardless of whether the workers hold a management or traditional R&D role. Would that all companies embraced the challenge to foster intrapreneurial activity! Avey goes on to illustrate:

The Kentucky Indiana Exchange (Kix) has long sought to showcase the great entrepreneurial spirit of our region, but what about the “intrapreneurial” spirit of our employers? Maybe it’s a concept that some of you are aware of, but it was unknown to me until a recent visit to Signature HealthCARE as a member of the 2013 class of Leadership Louisville.

When we arrived for our monthly gathering, we were given the opportunity to select one of several regional employers, and I chose Signature. I had heard so much about the company — the decision its leaders made to move the headquarters to the region; the work they were doing with the University of Louisville to foster innovation and business start-ups in the long-term care industry; and about their leader, CEO Joe Steier, a Louisville native who guided the company’s move to Kentucky.

We spent much of the morning with our host Joe Barimo, the VP of Corporate Learning. His passion for the company was quite apparent. We then visited with what seemed to be the entire senior leadership team, including Joe Steier. We had a terrific exchange, learning about the company, their move to Louisville and Signature’s three organizational pillars – Learning, Spirituality and Intrapreneurship. Learning and Spirituality were certainly two concepts with which I was familiar, but not “Intrapreneurship.”

It’s the idea of acting like an entrepreneur within a larger organization where employees are expected to be innovative, to take risk and pursue the development of innovative products or services within the company. This style of management allows the employees to feel as if they’re part of something bigger, as well as something they have a stake in. Traits like conviction, zeal and insight are encouraged. As a result, employees become more likely to try the kinds of approaches they might take if they were running their own business. The end result can be a breakthrough technology or a new and profitable product line.

What a great lesson in visionary leadership. How can it be applied to your organization? Your alma mater? Your business community? 

 

Are You Aggressive Innovators, or Defenders of Status Quo?

Our world has sped up. The demand for faster, “instant,” responsive products and services drives business competition for customers. A computer, for instance, with a faster processor is worth more than one with a slower one because faster page loads mean either a more enjoyable gaming experience or work productivity. Consequently, a higher price can be charged for a faster computer. In many markets, people are willing to pay a rush charge for added convenience or quicker availability. Why is the need for speed, then, missing in typical product development efforts? My friend, Jeffrey Phillips, addressed this issue with a recent blog post:

Three innovation clockspeeds

The pervasive lack of enthusiasm or even awareness of time in regards to innovation is a constant source of amazement for me.  In organizations transfixed by time, speed and efficiency, innovation and product development are often the slowest out of the gate, the longest efforts to accomplish and seem completely unrelated to the real world. There are, of course, reasons why innovation is slow:
  1. Innovation is uncertain and risky, so organizations try to move slowly to reduce risk
  2. Innovation (if done well) is often ahead of the market, so organizations try to time innovation to market needs and demands
  3. Innovation requires tools and techniques that are unfamiliar, which slows the process
  4. Innovation and subsequent product development processes are sclerotic, like blood vessels full of plaque, stuffed with unimportant but time consuming activities.

My stipulation is that you should do innovation as fast as humanly possible, even at the risk of skipping steps or bypassing checkpoints, because your internal clockspeed is almost certainly out of synch with the market’s clockspeed.

Your internal clockspeed

Your clockspeed (how fast your organization works) was set by management – this means that your clockspeed is relatively high when working on (the) familiar … and very slow otherwise.  Your operating models slow innovation down at exactly the time that they should be speeding up.  The strange thing about internal clockspeed is that it is similar to the weather – everyone complains about it but few do much about it.  

Clockspeed

External market clockspeed

Your markets are likely moving faster than your internal processes, since the markets are subject to competition, new entrants, substitutions and other factors that Porter and others made famous.  The real problem is innovation clockspeed.

Innovation clockspeed

If you compete in a lucrative market, there are a host of firms innovating right now, seeking to disrupt your market, create substitutes for your product or to simply replace the need for your product or potentially your market.  Clockspeed isn’t simply about bringing a new product to market faster, but about making the product or market obsolete or unnecessary.  

Getting obsolete faster 

Nobody cares about how efficient or fast your existing processes are to provide existing products and services.  What will differentiate firms in the future is an accelerated ability to innovate, at least as a fast follower if not an innovation leader, carefully tracking the external market clockspeed and anticipating innovation clockspeed.  

The challenge — should you choose to accept this mission, is to synchronize the clocks! Within your organization, take a long hard look at impediments to rapid prototyping. Examine systems that disincentivize risk taking and experimentation. Determine how to reject more ideas faster so that your organization is known for the rate of idea generation and implementation rather than the amount of time taken to vet one idea at a time.