Coined by Steve Blank, the term innovation theater has been gaining traction lately. As with all popular terms, we may be reaching the peak of inflated expectations on the hype cycle, with a lot more people using the term without fully understanding what it really means. Lately, I have noticed a general tendency to refer to most typical lean startup and design thinking practices as innovation theater (e.g. the use of sticky notes or hosting hackathons).
It is time to sound a cautionary note. Leaders need to be careful not to throw out the baby with the bath water. Many of the innovation practices espoused within lean startup and design thinking can create real value when applied properly. They only become innovation theater when they are applied in a manner that creates no value for companies and society.
What Is Innovation?
As company leaders have become more and more concerned with disruption from startups, they have been looking to build the capability to innovate within their companies. These efforts have been successful in some cases, but it is still the case that large established companies struggle to innovate. Unlike startups, large companies face the challenge that they have to explore new business ideas, while running their existing successful businesses.
Traditionally, these large companies are comfortable with generating ideas through their research and development (i.e. R&D). Leaders often believe that inventing breakthrough technologies is the most important part of the innovation process. As such, large investments are made into R&D with the hope that this will lead to breakthrough products and services.
Furthermore, in the attempt to act like startups, established companies have also been engaging in idea generating activities like hackathons and idea competitions. There seems to be a lot of value placed on cool new ideas. Several leaders have complained to me that their teams are not coming up with enough good ideas.
Focusing exclusively on technologies and ideas is where the problem begins. Falling into the trap of overvaluing ideas and technologies is the first symptom that you are headed towards innovation theater. While breakthrough ideas and technologies are important for innovation, they are not sufficient in themselves.
Successful innovation requires that companies take their breakthrough ideas and transform them into value propositions that resonate with customers. They then need to take those value propositions and embed them in business models that are profitable and scalable. Only when this has been achieved can we then say that a company has succeeded with innovation.
What Is Theatre?
It is also important for leaders to recognize that they cannot manage innovation in the same way that they run their core business. I have seen leaders invest in idea competitions, then turn around and ask the winning teams to write long business plans before getting further investment. Business plans are a problem because they treat innovation as if it is an execution challenge.
When teams are working on innovation, they are faced with a lot of uncertainties. Breakthrough ideas are full of unknowns. The best way for innovation teams to work is to spend their time searching rather than executing. What they are searching for are great value propositions and business models.
This is where we can start to make the distinction between real innovation and innovation theater. The ultimate question for any innovation program is whether it is creating value for the company. This is why we cannot just look at the different types of activities that a company is engaging in and declare that what they are doing is innovation theater. We have to look a little deeper.
Just because a company has an innovation lab with bean bags, sticky notes, smoothie machines and sherpas that run hackathons, does not necessarily mean that they are engaged in innovation theater. The real question is what the company does with breakthrough ideas once they have them. If leaders in that company invest time and resources for teams to turn those ideas into great value propositions and profitable business models then they are doing well. They should hire more sherpas, order more sticky notes and buy more bean bags!
If only it was that simple. The reason why companies end up with innovation theater, despite having the best intentions, is because the process of turning ideas into profitable business models requires a level of leadership commitment that is often hard to get. Once you move beyond ideation and start trying to build a business that creates value, several parts of the organization have to be engaged.
When leaders are mostly focused on driving the success of their existing business, innovation can be relegated to the margins of the company. These margins might have cool names like “lab”, “accelerator” or “incubator”. But if nothing of value ever emerges from those places, they might as well not exist. That is innovation theater and it should be avoided at all costs.
This article was first published on Forbes where Tendayi Viki is a regular contributor. Learn more at www.tendayiviki.com.
_”Successful innovation requires that companies take their breakthrough ideas and transform them into value propositions that resonate with customers. They then need to take those value propositions and embed them in business models that are profitable and scalable.”_
Yes. Unfortunately, this is the part that is not so obvious. Sticky notes, hackathons, and pitches they’re the outward signs. They garner attention and excitement and for the uninitiated, they’re the easy thing to copy. “Yes boss, we’re working on innovation, see…”
Like so many things there’s a fundamental understanding needed otherwise you’re going through the motions. Maybe over time those going through the motions will seek that deeper understanding and connect how these elements support the broader desire. Most don’t unfortunately.