Three Reasons Most Corporate Innovation Programs Fail
For most of the twentieth century, large organizations could project what the next five years would look like with a high degree of confidence, but technology has changed the rules of the game in the twenty-first century and created an increasingly ambiguous and befuddling business landscape.
These same organizations are now finding themselves having to adapt to said changes so that they can be a force tomorrow, without compromising what makes them a force today. The challenges of navigating this delicate balance were shared by GE’s former head of innovation, Beth Comstock, on the Future Squared podcast.
See Also: What C-Suiters and Corporate Innovation Teams Can Learn From Jeff Immelt’s Demise
Innovating in the corporate landscape is kind of like riding your bicycle across a minefield; doing it successfully requires planning, skill, and luck. But instead of landmines, what awaits a corporate innovator in a traditional, large organization is cultural inertia by way of entrenched values, processes, and systems that ultimately sabotage their good intentions.
Want to do some customer interviews?
Sorry, sales won’t let you speak with their clients for fear of compromising the relationship.
Want to run a fast experiment?
Sorry, you’ve got to complete this 10-page business case to apply for funding, and it will be several weeks before the investment committee meets. Oh, and what’s the ROI of your experiment anyway?
Want to host a prototype in the cloud?
Sorry, you’ve got to host it on our internal systems for privacy purposes, so the risk, time and cost to get this done will go up dramatically. Still want to proceed?
These common scenarios barely scratch the surface of what’s in store. In order to have a shot of succeeding, processes, systems, and values must be aligned with behaviors and realities required to truly innovate —such as speed, experimentation, cross-functional teams, access to customers and so on.
Sounds like a lot of work, right? That’s because it is. And that is precisely why most innovation programs fail before they’ve even begun, and it’s often manifest by the following three big mistakes that I come across all the time when speaking with executives in the field.
Most traditional organizations lack the capability inside the building to do anything other than incremental innovation, so naturally, they look to external consultants to assist. This not only helps them gain access to guidance and capability but perhaps more pertinently, outsource accountability to an external party.
Sadly, an overwhelming number of executives buying corporate innovation services don’t know what the hell they’re buying. It’s hard enough knowing where to start in this space, but this is made all the more difficult when executives are plucked from the wilderness of say, accounts payable, administration, and then given a token title of ‘innovation manager’ (often with little to no actual authority), despite not having spent any time in the space.
Such hiring decisions also speak volumes about how serious an organization is about innovation. That’s not to say that a procurement manager, or any unrelated role, can’t thrive as an innovation lead, but if I was hiring for such a role, I’d much bring someone on with much more experience in the space and look to develop people who have no prior experience, but have an interest in the space.
For consultants selling services that aren’t as tangible as, say, an umbrella, leading with “look, what you’re trying to do is really hard — we can’t guarantee success, but we can increase your chances of it…what it’s going to take is a deep understanding of your objectives and the capability gaps presented by your values, systems, processes, and resources, and then we’ll have to address all of these gaps in order to build an environment that truly supports innovation…it could take months, or years, to see genuine results, and it’s going to be hard…we’ll receive a lot of push-back and make a lot of enemies…..or you can just run a hackathon.”
Too many consultants sell what they purport to be silver bullet solutions, such as design thinking training, or a startup accelerator program, or an innovation lab; and while these can all add value, creating meaningful change and genuine value requires more than just isolated initiatives, but a holistic approach that accounts for the underlying organizational foundations and culture above all else.
Sometimes its because consultants genuinely fall victim to the law of the instrument bias; when you’re a hammer you see everything as a nail. Other times it’s because they just want to make a quick buck selling what they know.
Because consultants are in the business of making money, they are going to sell simple, ‘cookie cutter’ solutions, rather than solutions that are tailored to the client and will drive meaningful change. Of course, this helps them keep their margins high, and spend the time that they would otherwise spend customizing solutions on winning and delivering more work. Makes great sense for the consultancy, but the client usually loses out with an inferior product that doesn’t serve much purpose once the initial sheen wears off.
Too many times to count, I’ve heard clients of ours say that “we previously spoke to Consultancy X — they didn’t want to tailor their offering and insisted that it was the best and only way forward.” Alarm bells ring every time I hear absolute statements like these because every company is different.
What might be great advice in one situation can be terrible advice in another situation, and that extends to life in general. Not accounting for the nuances of an organization, its industry, and the ever-shifting competitive, societal, economic, political and technological realities of the day, is a surefire sign of a half-baked solution to a poorly-defined problem.
As human beings, we desire control, and so we take action in order to derive a sense of control. This is what behavioral economists know as the action bias (Patt & Zeckhauser, 2000). A classic example; opting for medical treatment instead of no treatment, despite clinical trials not supporting the treatment’s effectiveness.
Action bias is particularly likely to occur if we do something for others expecting us to act, which in the workplace, extends to our peers, superiors and our shareholders — we need to be seen to be doing something.
Football goalkeepers too have a tendency to dive to left or right on penalty kicks, even though they are statistically more likely to save the penalty kick by standing still (Bar-Eli, 2007). So corporate innovators take action, even though it might be the wrong action to take, to feel like they have a sense of control, as well as to appease other’s expectations.
See Also: 36 Cognitive Biases That Inhibit Innovation
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The WorkFlow podcast is hosted by Steve Glaveski with a mission to help you unlock your potential to do more great work in far less time, whether you're working as part of a team or flying solo, and to set you up for a richer life.
To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.
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