Introduction
According to the NTT DATA Innovation Index, 96% of executives state that innovation is an essential source of growth for their company.
This is not surprising: it is clear that leaders want innovation to drive growth. What is remarkable is that few of them actually achieve this goal: only 11% report that their company successfully brings groundbreaking innovations to market.
At InnovFast, we call this the innovation execution gap. We sometimes jokingly say that ‘the company murders great ideas with a smile.’ What we mean is that your environment is most likely working against you – the structures surrounding most companies are not aligned with innovation.
Resistance is pervasive, but it is a feature – and not necessarily a flaw – of good company design. It is the very nature of repeatability, efficiency, scale, and the bias towards the status quo.
Innovation teams often stumble because innovation itself contradicts many corporate cultural norms. That’s okay. You can acknowledge this, understand why, and adopt methods to work within the system rather than against it.
Why Do Innovation Teams Fail?
Before addressing how to bridge the innovation execution gap, it is important to understand why innovation teams often fail in large organizations. A number of environmental factors come into play.
Innovation invites uncertainty, complexity, and ambiguity. Companies want stability. The uncertainty of innovation conflicts with predictable, historical business metrics. Even if a program is launched with high-level enthusiasm and support, it is often discontinued when it fails to deliver short-term ROI.
The lack of standards, processes, and management for innovation leadership is another issue that works against teams. Without systems, teams struggle to move forward smoothly. Incentives within the organization work against new ideas and ways of doing things. The fear of failure kills motivation.
We all know the adage that it’s hard to get fired for doing nothing wrong. But innovation requires risk. Corporate ethics focus on ‘flaws’ rather than ‘potential,’ and the danger of failing prevents many potential intrapreneurs from trying.
Organizations that have tried to launch innovation programs or initiatives typically experience a sad but familiar pattern: once the initial enthusiasm wanes, momentum fades.
Employees find that new ideas, even those deemed excellent, are not commercialized. Each time this happens, distrust and resistance to future efforts set in. The cumulative effect is a collective lack of confidence in change.
With the company structured for stability, many businesses are simply unwilling to abandon the past to create the future.
Given that the company is structured for stability, many businesses are simply unwilling to abandon the past to create the future.
There are innate ‘blinders’ and ‘blockers’ within the company that, combined with the tendency towards the status quo, systematically oppose change. Employees are trained to manage existing activities rather than create new markets or products. Thus, once again, innovation is relegated to siloed efforts rather than a company-wide, customer-centric endeavor.
Yet, in the face of these enormous headwinds, some companies manage to innovate! Not just once, but repeatedly, again and again. There is no secret, but there are commonalities we observe among successful breakthrough innovators. Whether they are launching new products to market or transforming their own operations, successful companies have corporate alignment and a system focused on innovation capability.
They also have systems to define and quantify the impact of innovation activities on their business. Linking your efforts to measurable ROI clarifies the business value of innovation and helps protect programs from budget cuts.
Alignment may seem a bit superficial, but it is essential. Successful innovation requires consistent collaboration between people and systems to achieve the desired objectives of the organization and stakeholders.
Your innovation strategy must align with the overall corporate vision. When corporate alignment on innovation is well executed, the strategy is defined by corporate leadership and cascaded to teams. If you are unsure how your innovation strategy aligns with the corporate strategy, be clear. There must be clear communication and collaboration on initiatives that drive progress toward desired future states.
Without alignment, you will have individuals conducting innovation activities in silos, using the tool or process of their choice, which may not necessarily lead to a broader vision or impact.
The innovation team had to clearly define and document what they wanted to achieve as a company, as well as the timeline and track they would use to measure downstream economic impact. This alignment and communication contributed to the program’s success.
Example
As an example, we are working with a company nearly two hundred years old that operates in an equally ancient industry. Establishing an innovation program and fostering a culture of innovation throughout the company required enormous communication efforts, especially at the leadership level.
To succeed, it was necessary to gain buy-in from all levels and help executives understand the personal benefits they would derive from the program. Before working with them, they did not have a uniform, aligned agreement on what constituted a good ‘economic impact’. The innovation team had to clearly define what they wanted to achieve as a company, as well as the timeline and track they would use to measure downstream economic impact. This alignment and communication contributed to the program’s success.
Working closely with the Head of Strategy and Innovation, we focused on two workstreams to customize a program that aligns vision and culture, streamlines pathways to profit, and is set up to continuously fuel long-term growth.
Our efforts produced over 25 knowledge artifacts that inform the innovation program, and focused efforts to mature their operations, processes, and project pipeline to accelerate their digital transformation impact.
We fostered a culture of innovation throughout the company through leadership, incubation, and experimentation with the goal of advancing the company as a supply chain and logistics leader.
Conclusion
Innovation is difficult. It requires time, attention, and a willingness to tolerate the discomfort it entails. We all know there’s no magic trick to unlock it.
Even companies with good ideas struggle to operationalize them.
Remember that statistic that only 11% of technology leaders feel they successfully bring their breakthroughs to fruition?
The majority of them (59%) have a structured process to help them overcome these innate obstacles. Consistent innovation ultimately comes down to high-level vision, repeatable systems, and the deliberate practice of working in the unknown.
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