As I travel and meet innovation executives at various organizations, one of the patterns that emerge repeatedly is that of ventures struggling to get on the organization’s official work plans. In other words, there is space for experimentation and ideation but when the rubber meets the road i.e. decision-makers are expected to take a potential venture and dedicate focus and resources to it – it simply doesn’t happen. I call this the Sisyphean innovation pattern.
“Sisyphus was a king who was punished by the Greek gods to eternally roll a heavy boulder up a tall hill only to see it rolling down to the bottom every time it almost reaches the top. Having to go through this endless cycle of effort and failure is called a Sisyphean task.”
Why do organizations with good intentions find it so difficult to make that next level of commitment to promising ventures? The truth of the matter is that while most executives tell me that innovation is extremely important to them and is actually the lifeblood of their organizations, truly innovative ideas make decision-makers very uncomfortable. The combination of unusually high levels of risk and lack of clarity in ROI (Return On Investment) which characterize innovative ideas goes against everything that is taught in business schools. You either de-risk the project, thereby avoiding it from making a potential impact or simply block it from existence outright. It is very human to prefer safe projects that have much clearer ROI ratios and that existing customers are clamoring for, over the lack of clarity and high risk of innovation when push comes to shove.
The result is that we see a lot of activity around innovation. Be it open innovation with startups or internal processes that foster innovation from within. But whatever the process and method, these activities do not generate progress because everything that is generated never makes it into the official work plans of the business units. Oh, and making it into work plans isn’t enough unless it is above the cut line because being in the plans but below the cut, a line is practically not being in at all.
Having said that, organizations that wish to thrive in the long term must put in place mechanisms that make it easier for executives to make such decisions. Those mechanisms will allow certain innovative projects to get the opportunity to demonstrate success in the real world so that related decisions can be based on facts rather than opinion and even force to a certain extent long-term investments of uncertain outcomes to coexist in parallel to the mainline business.
There are three keys to such mechanisms that if adhered to will set the stage for successful long-term innovation:
Delay of decision point
Usually, when facing innovative opportunities, executives consider the potential next step as building a PoC (Proof of Concept) or even an Alpha version of the solution. This means that the cost of the so-called experiment, in this case, will be expensive and that failure (which by definition is probable here) will be painful. By changing decision-making about innovative ventures from high stakes big bets into a rolling sequence of merit-based guesses then the final decision about whether to build and then scale or not, is practically delayed over time. In order for this to be sustainable there must be a limit on the spending velocity for innovative ventures at every stage and just like startups with investors, so will venture have to present findings and proof to executives in order to receive an additional round of internal resourcing.
Consider learning as progress
One of the main messages of the lean startup movement was that action doesn’t mean progress and that building new stuff which is the natural tendency of corporations is a waste of time and resources when it isn’t preceded by rigorous validation and fact-finding. And so the second key for us is to adhere to this principle. And yet, there’s a caveat that’s unique to established organizations. Even the most advanced systems of innovation have to hand over ventures to the execution functions within the business units. At that point in time, the organization’s project management practices kick into gear and such principles as validation, flexibility and merit-based decision-making are thrown out the window. Therefore, it is essential that this key of continuing to invest in learning and making decisions based on this learning must be continued even when the venture is handed over for building and releasing.
Maintain a portfolio.
For a complete body of work, organizations should have, at any given moment, a collection of such innovation opportunities. It can be described as a portfolio of educated guesses kept on low flame i.e. capped spending velocity until a decision to scale is made for some of them based on merit. Once again, discipline is a must here since a human tendency would be to “scale creep” and bring a venture to scale simply due to momentum and set project milestones rather than actual results and merit.
In order for innovation to thrive in the long term, organizations must put in place the mechanisms that will allow executives to make decisions that balance the short-term needs with an ability to maintain a portfolio of educated guesses about the long term. If we don’t keep such opportunities alive, we will never have the chance of seeing them materialize. Keeping them alive requires inherent practices over time rather than the heroics of individuals which is always limited in scope and short-lived. Applying the keys to success described in this article at scale in your organization will bring you significantly closer to a state of innovation proficiency.
Contact us now to explore how we can help your organization thrive with innovative strategies and solutions. Let's drive meaningful change together!