It’s not easy to innovate. Many companies make it even harder on themselves by trying to turn the innovation engine on and off. Turn it on when a crisis erupts. Turn it off again when things are rolling along smoothly. Unfortunately, it just doesn’t work that way. Innovation tends to be all on or all off. You can’t just turn it on when you need it. You have to bake it in to everything you do.
Samsung is my favorite recent example of “all-on” innovation. Samsung recently rose to number two in Boston Consulting Group’s annual ranking of the world’s most innovative companies. According to BCG, Samsung is ahead of Google and only slightly behind Apple. Samsung’s mantra – which they apparently repeat at every meeting – is “Change everything but your spouse and your children.” In other words, everything must change. No wonder they make such cool refrigerators.
I was reminded of Samsung as I browsed through Rita Gunther McGrath’s book, The End of Competitive Advantage. McGrath identifies six warning signs that your innovation engine is broken. In general, all six signs have to do with turning the engine on and off. Here are McGrath’s big six:
Innovation is episodic – it’s the on/off switch. Would you bet your career on a project that might be switched off? Maybe not. In the environment that Samsung fosters, you don’t have to make that bet.
Process is invented from scratch – each time we turn on the innovation engine, we act as if it’s never been done before. Time for a brainstorming session! But there’s a lot to be learned (even on this website) about the nature and processes of innovation. Why re-invent the wheel?
Resources are held hostage – as Rosabeth Moss Kanter has pointed out, if you’re trying to finance innovation out of the “regular” budget, you’ll fail. Too many people already have dibs on the funds. McGrath writes that too many companies don’t play to win but rather play not to lose. To innovate, you’ll need to gamble. You’ll need a person with the authority to gamble and some funds for her to do it with.
Innovations placed in existing structures – if you turn the innovation engine on and off frequently, where would you place an innovative project? After all, it’s likely to be temporary. So, just make it a “bag on the side” of the existing organization. But innovations require new processes, not just temporary homes.
Judging innovations by “historic” criteria – perhaps the worst example of this is to measure the ROI of innovative new products. ROI works best when there’s some consistency and predictability in the mix. An innovation has no history. Applying standard financial metrics to an innovative product will simply stifle innovation. In an “all-on” environment, you can afford to develop innovative metrics for innovative products. In an on/off environment, you can’t. (For some non-traditional metrics, click here).
Holding the innovation to plan – of course, you’re going to create a plan for the innovation. The danger comes in sticking to it and holding people accountable for the plan as originally created. Things change. Some innovations fail. You’ll need agile leaders rather than by-the-book managers. Punishing an executive for failing to stick to the plan will eliminate any incentive for other executives to innovate.
Moral of the story: once you get the innovation engine running, never switch it off.