A while back, one of my consulting partners from another office asked me to review their client’s innovation process.
Their team had been engaged to review why their innovation process was not delivering results. Ideas were apparently being developed, but never successfully scaled within the company so that they were resulting in increased revenue.
To figure out why, the consulting team had reviewed the company’s innovation lifecycle process, showing what happens to an idea in order to get implemented.
The original process showed how an idea should first follow design thinking principles, before being turned into a solution using agile development, and finally being piloted and launched.
The consulting team had quickly determined that the issue was that the process had forgotten several steps at the end, showing that the idea needed to be “integrated into the core business” and “scaled”.
After reviewing the updated process for a few minutes, I immediately asked the following question:
At what point are the managers of the existing core business units being involved in the innovation development process?
The answer I received was painful:
That’s not what the client asked for. They just wanted to know what the process should be, so we can’t change that.
This broke my heart and immediately made me realise why this company would continue to fail in its innovation efforts.
It is something I have seen far too often and is based on a misguided assumption.
What most companies get wrong about innovation processes
Companies think that if they are failing at innovation, the reason is that their innovation processes are wrong.
After all, the past century of business management education has taught us that in order to improve performance, you need to understand, improve and track the performance of your key performance indicators.
As Peter Drucker famously said: What gets measured, gets managed.
This was the foundation for some of the most effective management principles of the 20th century, such as lean manufacturing and six sigma, where process performance was scrutinised to find every opportunity to remove inefficiency and improve output.
As such, companies have been taught that if their innovation efforts are failing, it means that there is something fundamentally wrong with the innovation management process. And if you were to fix the official process and get all members of the organisation to follow it, then your innovation success rate should skyrocket.
However, this is not what happens in reality.
And the reason is simple.
Innovation relies not only on new ideas being developed and tested, but then accepted and integrated into the company.
And this is where so often, promising innovation projects fail.
In fact, about 96% of innovation projects fail to make a return on investment.
Even though they show promise, decision-makers and managers are afraid of what might happen if they were to implement innovation projects:
- What if the new innovative offering were to fail?
- What if it were to take away business from the offerings which are currently selling?
- What about the skills, relationships, team and processes we have spent years building up to make the current offering work, and which the new innovation would change?
- What if I (as a manager) don’t know as much about the new technology in the new innovation and it makes me look (and feel) inferior?
What companies and management don’t realise is that this is a completely normal human reaction.
And it exists because it has evolved to help us survive as an individual and as a species.
In fact, there is a lot of scientific evidence behind what makes people in management positions afraid of new innovative and creative ideas:
- Loss aversion explains why we fear losses more than equivalent gains (and so try to avoid unproven ideas)
- A fascinating 2011 study showed that decision-makers said they valued creative ideas, but subconsciously reacted to new ideas very negatively
- People are afraid of challenging the status quo if they do not feel psychological safety
- The modern school system trains people to only feel comfortable delivering answers that people know are correct, rather than more ambiguous creative answers
- Studies of wild and captive apes have shown they are only willing to be curious and creative when there are no external threats
- Employees often defer to the opinions of their senior executives rather than challenging the status quo (the HiPPO principle)
The overwhelming scientific consensus is that managers and executives in companies don’t want to prevent innovation from happening, but that they are almost hardwired against it.
We all have unconscious biases in our behaviour which have evolved over millions of years to keep us safe. And it is these biases which make decision-makers afraid of implementing new ideas.
This is why new ideas are so often not successfully implemented into a company.
Not because of a lack of process in a powerpoint strategy deck.
But because of raw human fears, biases and emotions.
So what can we do about it?
If you want your innovation projects to be more successful, you cannot just redesign the official process flow for how your company is supposed to operate.
You need to investigate and fix the core reasons for the issues in the first place.
From an innovation perspective, companies like yours can get a lot of benefit by bringing in an expert (like myself) to understand when ideas are encountering resistance, and what can be done to remove that resistance.
This may involve working with the decision-makers to help them unlock some of their biases, to putting in place a strategy and management principles which help innovation efforts to flow from inception to completion more effectively.
One of the most effective activities is ensuring that whichever business unit will be the recipient of the innovation actually has a sense of involvement in the development of the solution. This will result in leadership from that business unit being less likely to reject the ideas once they see them for the first time, as they will have been on the journey of development themselves.
And above everything, make sure that the whole company understands why the innovation is meant to happen in the first place. Being able to communicate the innovation strategy will help this immensely.