Anyone who has worked inside a large organization can rattle off a lengthy list of the things that regularly kill promising ideas: conflict with existing businesses, naysayers, management turmoil, insufficient resources.
And yet when companies suddenly decide to “get more innovative,” starting hackathons, idea competitions, and accelerator programs, they typically forget to address all those things that kill perfectly good ideas after they hatch.
Why? Spinning up new innovation initiatives is exciting, but changing the environment those new ideas are born into is really difficult. The former you can do with a few staffers and the CEO’s blessing, but the latter requires broad organizational support and ongoing effort.
The result is a lot of innovation programs that can build fantastic concept cars, but have a tough time getting production vehicles onto the road. Here are six ways to change that.
Start with a survey. What would new product development executives or
managers in the R&D lab tell you are the organizational dynamics that ice their best ideas? Executives may be playing favorites with one way to approach a particular opportunity, or it may be hard to envision how a tiny customer base can get big. Simply asking the “innovation MVPs” in your company about these dynamics will yield some surprising answers — some of which you’ll want to act on quickly. When my publication, Innovation Leader, surveyed nearly 200 innovation-oriented executives in partnership with the consulting firm Innosight, respondents told us about plenty of good reasons to pull the plug on projects, such as not hitting deliverables. But the most common cause of death they reported? Business unit executives hadn’t bought in to the idea.
Decide if it’s a consultancy or a skunkworks. Many innovation groups want to have it both ways, acting as a partner to the business units to help them tackle near-term opportunities, while also developing further-out, “disruptive” ideas that could shake up their industry. But those are two separate functions that require different staffing, relationships, and resources. They need different kinds of runways to ensure that their ideas can take off.
The first approach requires the creation of an internal consultancy to the business units, asking them to identify needs or opportunities that your team should work on, and agreeing that at a certain point, you’ll hand over projects to them once they’re ready to move past the testing phase. At the storage and software company EMC Corp., business units and functional groups like marketing or human resources set out “challenges” that they’d like employees to work on. In 2014, more than 5000 submissions came in. The challenge sponsors picked the best ones, and they are responsible for eventually rolling out the product, service, or process improvement. That kind of runway is smooth, but it is also biased towards designing the kinds of innovations that business units think they need.
The other approach, a skunkworks, can develop ideas that may require their own distribution channels, or compete with products that the company already sells. Skunkworks often need to be protected from the business units, so that they have the freedom and resources that their ideas need to get out into the market. Sometimes that requires creating a separate operating structure.
For example, at Lowe’s, the $53 billion retailer, Lowe’s Innovation Labs has a team that collaborates with outside startup companies to build prototypes. One area of focus: how technologies like virtual reality and augmented reality will be able help consumers visualize the end result of their home improvement projects.
“We’re working on the problems that haven’t arrived yet,” says executive director Kyle Nel, who reports to the company’s chief information officer. And he cautions that trying to apply “conventional retail metrics” will kill any idea “that looks remotely different from what is currently out there.” Instead, the labs are measured on factors like the potential of their ideas to change shopping behaviors in positive ways, and to burnish the Lowe’s brand.
Get external validation. In most organizations, the terms “innovation” and “R&D” are synonymous with “top secret.” Firms are hesitant to socialize ideas with business partners, customers, or media before they’re considered polished enough for an official launch. That leaves many ideas swimming around inside the corporate fish tank for far too long.
At Dell, chief innovation officer Jim Stikeleather says that selling an edgy new idea or technological approach to internal constituents gets much easier when external constituencies are already up to speed or even already eager to get their hands on it. Executives in the company, Stikeleather says, “need to hear [about the idea] from their teams, the customers, and reading about it in the press.” Once that starts to happen, he adds, executives start to feel like “it’s their idea.”
Once an idea is out there, customers can express their desire for it, one of the most powerful forces for overcoming organization inertia and resistance. And showcasing the work of an innovation program or R&D lab, as @WalmartLabs does on its website, has a fantastic side effect: it will help attract fresh talent to the organization. The benefits of revealing what’s in your pipeline can be greater than the risks of divulging it to competitors.
Invest real money. Many companies have figured out how to parcel out small amounts of money to employees cultivating something new. One example: Adobe’s Kickbox program, which supplies tools for refining and validating an idea, along with a $1,000 pre-paid credit card to cover expenses. But ask innovators how they secure a couple million bucks for the infrastructure and marketing necessary to properly launch an idea that has shown promise in the pilot stage and…you’ll hear crickets. Making it possible for ideas to turn into real businesses means creating a process for investing real money in them, based on actual market data (instead of baked-in company biases.)
Reward decision-makers who back winners. In the startup world, venture capitalists compile data about how many pitches they’ve listened to, how many they put through due diligence, and how many they invested in. They’re incentivized to say yes to a few, since they make massive amounts of money when they back the next Facebook, Google, or Dropbox. Ensuring that there’s a financial and reputational upside for executives who back winners — and that backing losers isn’t a career-ending move — is vital to making sure new ideas get the money and political support they need. Otherwise, the “forces of no” will defeat most worthwhile notions.
Think weekly, not quarterly. Venture capitalists meet every Monday to review deals in the pipeline. Too often, I hear about quarterly meetings of innovation review committees. Moving slowly kills ideas that don’t need to die and demoralizes innovators. Look for every possible tweak to process and oversight that can improve the aerodynamics of building new things.
It’s laudable that large companies are experimenting with new ways to foster innovation and an entrepreneurial mindset among their employees. But CEOs, boards, and business unit chiefs need to pay more attention to the environmental conditions into which all those promising new ideas will be born.