Driving innovation, growth, and success from within is at the heart of successful companies of tomorrow.
Yet inside established organizations, disruptive ideas often fall short because of the bureaucracy, hierarchy, slowness, and cultural norms that permeate them. The tendency is often to suppress new ideas.
In fact, employees are tempted to give up and fall into the accepted understanding that big innovations always come from the outside. But it’s nothing like that at all. Data show that over 70% of the world's most transformative innovations are conceived of and developed by internal entrepreneurs.
So, how to effectively execute internal projects and guide new, exciting ideas from within?
At our recent Innov8rs Unconference, we discussed these topics with Kaihan Krippendorff, CEO at Outthinker Strategy Network. Kaihan, drawing on over a decade of in-depth research of hundreds of successful innovators and front-line employees, shared exclusive insights, tools, frameworks, and techniques used by successful innovation leaders to manage and unlock the value of employees’ ideas and increase corporate innovation levels as well as deliver bottom-line results.
Here’s a summary of what we’ve learned.
What’s The (True) Narrative Of Innovation?
We overestimate the contribution of entrepreneurs to innovation. Elon Musk, Steve Jobs, Bill Gates, and Michael Dell are certainly among the most innovative people we admire. And there's a remarkable similarity between their narratives. They're all white men who got ideas in college. They then went across to the United States West Coast, put a small team together, and ended up in a garage to work on their innovation that eventually disrupted many big established companies.
Kaihan thinks we must question whether that is the true narrative of innovation or maybe it's just a story that fits the hero’s journey and sells.
By looking at a list (vetted by a panel of Professors from Wharton Business School) of the 30 most transformative innovations over the last three decades, Kaihan found that 70% of those were conceived of, and developed by, internal entrepreneurs- definitively not in a garage.
“If it were not for internal innovators, we would not have a mobile phone, send an email, or get an MRI. In short, we would be living in a radically inferior world”.
However, the actual problem is that only a few employees feel their ideas matter.
Whether you’re an internal innovator or a leader looking to unlock internal innovation and enable people to execute transformation from within, you must be aware of seven barriers and be ready to overcome them.
The IN-OVATE Framework: Innovating From Within In 7 Steps
Based on the analysis of over 300 companies and interviews of 150 internal innovators, Kaihan has identified the seven most common barriers to driving innovation from within and defined the practical tools for overcoming them. Both the obstacles and the tools are summarized in the IN-OVATE Framework.
1. I- Intent
Every innovation journey begins with seeing and deciding to take action on an opportunity, i.e., innovation starts with the intention to innovate. And this includes discovering, choosing, and acting on opportunities. The intent barrier shows up when employees aren't even trying to innovate, making it impossible to spot or pursue an opportunity.
Typically, one or more limiting opinions hold back the intention:
Behavioral beliefs: uncertainty about the outcome of the actions.
Control beliefs: uncertainty about the ability to take action and complete the task.
Normative beliefs: uncertainty about how other people would react.
To solve that and unlock intent, the company should treat the employees as entrepreneurs.
2. N- Need
Simply spotting a market need is far from enough. It must also match the company's strategic needs- or your innovation project won’t be supported.
Yet most employees want to innovate and are inspired to look for new ideas. Still, they don't understand what the company needs or the overall strategy to the point that less than 40% of mid-level managers can name even two of their company's top strategic priorities.
“We don't spend enough time communicating the strategy to employees. We don't understand that our employees are not the evil entity that's putting barriers to our innovation. They are our customers”.
To make this a little bit easier, a straightforward solution could be simplifying strategic plans and putting together simpler statements of purpose that everyone can understand.
3. O- Options
"Options" can be a barrier when employees understand what both the company and clients need, but they can’t generate many innovative ideas. "There's nothing more dangerous than an idea when it's the only one you have. Successful internal innovators never pursue one idea; they have a portfolio of ideas”, says Kaihan. The solution here is incentivizing them to generate a flow of new ideas and not to get too attached (too early) to a few ones.
4. V- Value Blockers
This barrier is all about conflicts between business models. As soon as you have an innovation idea, there's a natural business model around it (e.g., pricing, positioning, and branding) that is inconsistent with, and disruptive to, your company's current business model. In order to reduce this internal conflict, innovators must redesign their ideas so that they do not impede the company's standing but rather enhance it.
5. A- Act
"Act-Learn-Build" (ALB) is the best approach for most innovation ideas and is the same as taking action on ideas to prove them. Yet organizations tend to prefer a “Prove-Plan-Execute” (PPE) philosophy and ask employees to prove their ideas before giving permission to take action.
This creates a vicious circle: if they can't take action, they can't prove their idea will work, so they can't take action. Accordingly, companies should stop demanding people to create a business plan and rather let them act and experiment.
6. T- Team
You’ve designed the experiment you want to conduct. Now it’s time to take action, for which you need to assemble a cross-functional team with the right attributes to ramp up the innovation quickly. Easier said than done.
Over his career, Kaihan has witnessed that innovation has greater chances of succeeding when there's a groundswell of informal support around the idea long before asking leaders for permission to act.
Yet again, corporations inhibit internal innovation by default: they use silo work teams designed for repetition, efficiency, and reliability (while you ideally need a team built for learning, adaptation, and flexibility), act slowly, and value results over learning.
Companies then need to break down hierarchies and silos to enable innovators to build small and agile teams with all of the functions represented in them.
7. E- Environment
Suppose you have activated your Intent, identified a strategic Need, generated many exciting Options, predicted the Value Blockers, designed the right experiment to Act on, and recruited an ideal Team. It doesn't mean, however, that your organization will immediately recognize your innovation as brilliant.
In a way, internal innovators look like entrepreneurs: they are innovative thinkers, tend to take action rather than ask for permission, and have strong market awareness. But in other ways, they are very different: they don't like risk because they're betting the company's money, they view the political challenge as part of the problem-solving process, they don’t expect immediate support, they’re usually humble and not necessarily looking for the attention, they can work across silos with flexibility, and they don’t see rejection as a sign that innovating is impossible.
"In general, internal innovators find themselves operating in a hostile environment that does not support their efforts."
Getting support for new ideas is complicated because of four major environmental factors to manage: leadership behavior, types of talent, organizational structures, and cultural norms.
As such, internal innovators must understand (and deal with) the context in which they operate. "They must assess the forces that will most strongly affect their efforts and learn to leverage tailwinds while managing headwinds skillfully", concludes Kaihan.
