There was a time when it was a real struggle to convince corporate leaders that their companies needed to innovate in order to create new growth. That argument seems to have been put to rest. Most leaders are now looking for ways to drive innovation within their companies. They seem to be genuinely convinced that innovation is the most important driver of future growth.
The difficulty arises when leaders are faced with what they actually have to do in order to drive success. When faced with the level of investment needed in terms of time and resources, most leaders balk. They immediately start looking for shortcuts and coming up with a series of pushbacks. Do we really need to do that? Could we not just take this easier path? I am often surprised by how little time leaders are willing to invest into something they themselves refer to as their most important driver of growth.
In my years of experience, I have seen many different versions of innovation shortcuts proposed. It would take a very long article to go through each one. So I have selected a top 10 list of shortcuts that I believe are the most fatal to innovation success. These shortcuts are to be avoided at all costs. Leaders that insist on taking these shortcuts should not expect to get good returns from their investments in innovation
1. There Is No Innovation Strategy
The leadership in a company should provide clear guidance of the arenas that innovation teams should be exploring. The shortcut taken here is to simply tell teams to work on cool stuff without guidance. The problem arises when it’s time to make decisions to scale those new ideas. Innovation projects that don’t have clear strategic goals are less likely to be taken to scale.
2. The CEO Has No Time
The CEO should spend 20%-40% of their time on innovation. The shortcut taken by most CEOs is to spend less than 10% of their time on innovation. Without leadership support most innovation programs don’t succeed in the long term. In particular, CEO support is needed to drive the transformation necessary to make innovation a repeatable process in an organization.
3. We Are Working On Only Two Ideas
The principle for investing in innovation is that companies should be making multiple small bets that increase over time, but only for those ideas that are showing progress towards success. The shortcut taken here is to not make multiple bets but choose two or three big bets. In such a scenario, the chosen ideas are ‘condemned to succeed’. There is no option to fail if we make a few big bets, and embracing failure is a key part of finding the right ideas to scale.
4. Innovation Has No Power
To drive a repeatable innovation process in your company, innovation leaders need legitimacy and power. The shortcut taken here is to appoint a Head Of Innovation with two layers of reporting above her and zero access to the CEO. This is often an easy hire that avoids the organizational design that would be necessary to give the position more power. The downside is that innovation leaders without power don’t accomplish much during their tenure.
5. We Don’t Want To Talk To The Core Business
Innovation succeeds when there is good collaboration between the innovation teams and key functions within the core business. The shortcut taken here is for innovation teams to avoid any contact with these key functions until their ideas are ready for launch. In particular, innovation teams love to avoid the Legal and Compliance function. This becomes a problem because these functions are not going to simply sign off on your idea once it’s ready for launch. If the goal is to scale our innovations in the market, then collaborating with key functions early and often cannot be avoided.
6. We Reward Hitting Revenue Targets
Due to the nature of the risks innovation teams take, companies should have a different and distinct incentive system for innovation. This is really difficult to do. So, the shortcut taken here is to stick to the traditional model of incentivizing the accomplishment of revenue targets. This puts innovation teams whose ideas fail at a disadvantage and incentivizes people to work only on ideas they are confident will succeed. The result is that teams will work mostly on efficiency innovations to improve the current business.
7. Innovation Teams Work Part Time
Most companies have financial resources to invest in innovation. What they often lack is the time available for teams to work on new ideas. The shortcut taken here is to allow teams to work on innovation projects part time. We are lucky if we get teams that can dedicate over 30% of their time on any given innovation project. Leaders often suggest that since their teams don’t have the time to run experiments, the company should just hire external vendors to do this for them. Teams that work on innovation part time take a long time to get to launch. By that time, a competitor may have already launched a similar product and the moment to get ahead has passed.
8. We Want Detailed Business Plans
Even for the teams that work part time, the leaders still want to see detailed business plans with five year projections. Given the time it takes to create a business plan, this should really be referred to as the long cut. However, the shortcut taken here is that leaders want to make investment decisions without the teams having tested or validated their ideas. Taking a shortcut that avoids testing business ideas is almost a guarantee of failure.
9. There Is No Innovation Skills Building
To make innovation a repeatable process, companies need to invest in hiring and developing world class innovation skills. The shortcut taken here is to invest in the smallest amount of training possible. The question I often get asked is why the company needs to invest in a four day bootcamp. Can we not cut the days in half and cover the same content? Also, once we have done the training, the teams are ready to innovate, right? It takes time to develop innovation skills and this is something that companies should invest in.
10. An Excessive Focus On Ideation
Ideas are an important part of innovation, but they are not the ultimate goal. What we do with those ideas is what matters. The shortcut taken here is to constantly seek the ephemeral sparkle of ideation at the expense of long term results. The hard part in innovation is not the ideas, but adapting them until you have a value proposition that customers care about embedded in a profitable and scalable business model. There is no shortcut here. The hard work of creating value has to be done.
No More Shortcuts
Now that most leaders are convinced about the value of innovation, it is time for them to accept what they actually have to do in order to drive success. They should embrace the level of investment that is needed in terms of time and resources to succeed with innovation. Let’s stop looking for shortcuts or coming up with push backs to avoid doing the hard work . If innovation is our most important driver of growth, then company leaders should invest the effort necessary to make it work. Taking shortcuts might give you the feeling that you are at least trying something. However, leaders that insist on taking the shortcuts listed above should not expect to get good returns from their investments in innovation.