Three Ideas for Realistic Innovation

Is focusing on flawless execution destroying innovation at your company?

Published: Wednesday, March 29, 2017 - 11:02

In a startup’s early days, innovation is the name of the game. But once companies gain size and recognition, they go into maintenance mode, unwilling to let new approaches take hold. When the CEOs of these larger corporations do seek innovation or change, they expect a seamless execution.

Here’s the problem: There is no such thing as flawless execution of innovation. Change and disruption, by their very nature, are messy endeavors. If an idea makes perfect sense, someone’s already done it.

With the right team, space, and methodology, even massive corporations can create something truly unique. But how are these essential elements acquired?

Thinking outside the boxes

Vijay Govindarajan, former chief innovation consultant at General Electric, looks at innovation as a series of three boxes: one for managing right now, one for forgetting yesterday, and one for creating tomorrow. Large companies get trapped in the first box, unable to realize that they have the resources to drive the second and third. All they need is a nimble mindset.

This is why corporations looking to innovate need actual entrepreneurs on the team. GE has been putting this lesson into practice, raising salaries and adjusting its PR image to attract the unique entrepreneurial minds that will help it fight the disruption of the internet of things (IoT).

Entrepreneurship isn’t a taught skill; it’s a personality trait. Quirky, opinionated outsiders provide value that no amount of institutional memory can replace.

Solving the right problems

When trying to innovate, company heads often get anchored to certain pain points: “Why can’t we get more customers to buy our product?” “Customers are now buying online instead of at our retail stores. How do we fix it?”

But these are an organization’s problems, not its customers’. By spending energy on identifying customer issues—rather than the company’s—and looking at what assets they can use to solve those issues in a new way, corporations will have much more fruitful discussions about where to start the innovation train.

Once that train starts moving, it’s time to look at the process to create innovation (rather than the same workflows and approaches used for decades).

News Corp., in efforts to survive the increasing multimedia threats to its industry, is dismantling its legacy model in favor of an innovation-focused approach. The company is breaking down its hierarchy into autonomous teams, or “flocks,” that can steer toward customer needs without shifting the entire business’s focus.

Defining success (and failure)

When setting out on any innovative project or restructuring, one essential step is setting the parameters of success. But when large corporations make this attempt, those parameters are set so far ahead that it can be difficult to pivot away from disaster before it’s too late. The Titanic saga comes to mind here.

More successful innovators set testable metrics for success with a signal phase—a time period wherein teams determine whether an initiative has real potential. When the signal phase passes or the allotted budget runs out, it’s time to stop. Companies that do well understand when to invest more and when to abandon failures before they invest too much time or too many resources.

The old-style approach makes sense on the surface: The perfect idea that nobody ever thought about is guaranteed to be worth billions. The problem is that these ideas no longer exist. Rather than kill any idea that isn’t an obvious smash hit, take the steps necessary to lower the risk. Leaders must cultivate those imperfect ideas. Only then can truly innovative alternatives have a chance to grow.

First published on the SmartBrief blog.

About The Author

Henrik Werdelin

Henrik Werdelin is the founding partner of Prehype, a venture development firm. Prehype co-creates new ventures and incubation programs with VCs and corporations and launches successful venture-backed startups, such as BarkBox, AND CO, and Managed by Q. Connect with Prehype on Twitter.