Why is ‘Innovation’ sport very tough?

posted by Ravi Arora July 13, 2017

In my post a year ago, I explained that Innovation is an organizational sport. I explained that the starting point for this sport are innovation bets which one places based on his predictions about the future. Unlike many other bets that purely rely in luck, innovation bets have a small factor of chance. The success depends a lot on how orderly the resources were spent on converting ideas into innovations and the choice of bets. Therefore, to accomplish the bets, one needs to have a strong resolution to invest (right resources for a long time) in them regardless of the situation in the organization. Unfortunately, resolutions are not popular because of the low success rate of new-year resolutions. On the other hand, resolutions made in Death-will and Promissory-notes are always met! I also explained the three main reasons for employees not engaging in this sport – (a) Overt focus on annual plan as compared to long-term plan (b) Not having a lead measure for innovations (c) Obstinacy amongst managers to continue dead projects because of fear of failure.

I also explained that like other sports, innovation can be made more rewarding for people and companies if we fix two problems (a) Integrate innovation performance with remuneration of people (b) Modify the method to declare most innovative companies

In the same post, I had explained that those companies who follow SII (Standardization, Improvement and Innovation) model and PDCA methodology, mistakenly believe that they are innovating. Changing SII to IIS and PDCA to PCDCA will help such companies in driving innovations.

In this post, I will highlight the reasons why Innovation is considered a very challenging sport.

Captain is the key

Ideas are the starting point for innovation. Hence idea generation is a critical step but completes only a fraction of the innovation journey. The resolution to invest resources in select ideas must be made by the manager who owns the area in which the idea needs to be implemented. Hence while ideas can be bottom-up, innovations are always top-down. All ideas travel upwards until it finds a person who is willing to place bet on the idea and makes a resolution to lead/coach a team. This doesn’t mean that all innovations travel all the way to CEO. Like other sports, there could be multiple teams engaged in innovations, each led by a person who can invest in the ideas. There are instances when a manager, in his own area is not able to take the decision to invest in an idea and looks upwards for support. These are typically those ideas that target the bottlenecks either in processes or in products.

And captains are rare

Captains/Leaders for innovation projects are typically middle to senior managers. Performance appraisal in companies is a chisel that shapes managers year after by chipping off some undesirable behaviors. This chisel results in getting rid of the rough edges and makes managers more predictable in achieving the annual targets and strongly discourages failures. It chisels off the traits that drive innovations eg: Drive to experiment creative and out-of-box ideas and encourage their team members to do so.

Creativity is useful in all sports but is necessary for Innovation

The starting point of the innovation sport is ideas after which one needs a resolution and resources to complete the execution.  Associative thinking is considered to be important for generating new ideas and Indians are gifted with Associative thinking.  Organizations need to develop the four skills that are necessary for Associative thinking – Questioning, Observing, Networking and Experimenting. While the Prime Minister of India Mr. Narendra Modi is doing his bit in promoting these skills, organizations need to find a way to focus on building these skills through their Human Resources.

(Note: Some people confuse between innovation and creative outcomes that have a commercial value.)

Like all other sport, popularity of innovation sport depends upon the culture and the good news is that culture can be developed

Cricket is not played in America and Rugby is not popular in India. Why? The easy answer is that these countries do not have the culture. Likewise, many leaders and managers say that they do not have the culture of innovation. Not having a culture of Rugby and Cricket may not be harmful to nations but not having a culture for innovation is disastrous for organizations. What is culture?  Can it be built? How? Processes are the building blocks for culture. If processes are followed persistently and employees enjoy and take pride in following them, it would result in culture. Let’s take an example of the early stage of the innovation life cycle (ideation) to explain the importance of cultural elements and how processes can help.

An idea takes birth in the mind of an individual. The organization thereafter needs to invest in the idea to get to the innovation. The originator of the idea can make this investment only if the idea falls clearly in the area under his/her control/influence. This is rarely true as typically the implementation of ideas need involvement of several others beyond the control/influence of the ideator. Therefore, the first step for the ideator is to share the idea with others, which seems to be straight forward. Unfortunately, it needs support of quite a few cultural elements as there are several forces that discourage a person from sharing his/her idea. I call these forces as drags, which leaders often refer to them as culture!

Defense strategy is an integral part of this sport

Innovation, as the name suggest, is an offensive strategy. It aims to take a leadership position. Hidden within innovation is its defense strategy. Companies try their best to maximize their revenue from new product innovations by protecting their innovations from getting copied by the competitors.  They use patents for this purpose. I believe patents are not the only source – There are other ways to keep the competition at bay.

It is of long duration – We need a method to keep the scores over months and years

The memory of organizations is very short primarily because of two reasons (a) People change positions and places (b) Focus is predominantly short-term.

Innovation projects need perseverance for a much longer time. Unfortunately, companies do not have a method to track, report and analyze innovation projects. For innovation, there are primarily two things to measure and report – input in the form of effort or resources and output in the form of impact. Who do you think can design a system to keep score over multiple years that will help in developing the perseverance needed for innovation? In my view it is the CFO who should consider innovation projects as precious inventories, report annually to leadership team and facilitate discussions – very similar to typical inventories which are part of the P/L and Balance-sheet.