Why does innovation fail most of the time?
This is a conundrum that obsesses Doblin’s Larry Keeley.
He suspects one of the root causes is that we are too busy with innovation theatre - the things we do because they feel good. And this problem is bigger than we think.
At our Toronto event last November, Larry described how, in 2017, he saw “stupidities of epic scale” in multiple slick, new, multi-million dollar Silicon Valley corporate innovation units, stocked with all kinds of advanced technologies.
“I think it’s mostly a palliative,” he said. “Senior executives can come from the sponsoring companies to SIlicon Valley, where they all believe the future happens first, and see stuff going on that they find mysterious, and they’re sort of comforted. They think: oh good, we’re innovating. That’s what I think of as innovation theatre.”
So how do we move past doing what feels good, and start doing what works?
We have to innovate in the right way on the right ideas, and focus on competency over culture. But first, we have to let go of a few things.
Three fundamental disconnects of innovation theatre
It’s not our fault that what we believe about innovation is mostly nonsense - we’ve been exposed to numerous “mad genius” myths around it since childhood. We tend to think that if we could just be more creative, if our companies had a more creative culture, we’d win the innovation game. Nope, says Larry. The problem is not creativity, or culture. The problem lies in three fundamental disconnects.
1) Innovation teams rarely focus on the right challenges.
More than 95% of the time, when your team is stuck in a room and told “ok, innovate now”, the problem statement you’ve been given is wrong.
2) They compound this by using weak processes.
We use the wrong methodologies. We tackle problems with brainstorming and other weak tools. According to Larry: “Brainstorming is a carcinogen that the surgeon general should get around to regulating.”
3) Then organizations make it worse: hey, this might be risky!
Organizations large and small will be theoretically in favour of innovating, but in practice will find all kinds of reasonable sounding reasons to tell you why your idea won’t work.
Larry says: “When an organization tries to commit itself to unfamiliar ideas, roughly 94.4% of the time they fail to return the cost of capital to the enterprise. That means a scant 4.5% of the time, 4-5 times out of every 100 initiatives, the resulting initiative returns the cost of capital to the sponsoring enterprise. This is roughly where medicine was when the super-sophisticated, really promising, forward-looking treatment of the day was leeches.”
Innovation comes from integration, not invention
In the 21st century, for the first time in the history of our species, innovation is less about the primary invention of the new and more about the elegant integration of the known. As Larry puts it, It’s now your job to make cool stuff from known stuff.
In our shared economy, innovation has moved out of the realm of the mad genius, and into the realm of kids playing with building blocks. Assets and tools abound, and can be used by anyone.
“This is what kids do now with their building blocks: they build badass businesses of scale that manage velocity and complexity, and do so in a way that’s secure. This is actually how the world is built today. They are working off a library of tens of thousands of building blocks, of known capabilities - little things you can license cheaply and plug in and that work well with each other.”
AirBnB is a prime example. In 8 years, they passed 2.3 million rooms in inventory - which makes them larger than the big three global hotel chains combined. How did they manage this without actually owning any of these rooms? Their tech stack: 57 apps in total. This stack enables them to gives people on both sides of an ecosystem a way to trust one another - a very simple idea, and a very successful one.
“So if you wanted to create a collaborative capability later this same day, which of these capabilities are unavailable to you? Very few. Most are. AirBnB only has 7 that are slightly proprietary. A good tech team could find you workarounds for all 7 in a few hours.”
How to move beyond innovation theatre
According to Larry, there are three steps you must take in order to stop doing what “feels good” and start doing what works.
Step 1: Innovate the right way
After running more than 1,200 world-changing innovations through pattern recognition and clustering tools, Larry’s team at Doblin found 10 types of innovation, which they then categorized into three colour-coded groups:
- configuration (blue, taught at business schools);
- offering (gold, taught at engineering schools);
- and experience (red, taught at design/social science schools)
Successful innovations include, at minimum, 5 of those types and one of each colour. (see their complete Ten Types framework here).
Simply put, you need to ask your engineers what’s possible from a technology perspective; your designers what’s desirable from a customer perspective; and your business leaders what’s viable from a business perspective.
“Real innovation comes when you break down those disparate points of view, and you get people to actually bring their empathy and their skills and their tradecraft. And when you learn to do it in a balanced way you get bolder ideas that are much easier to implement and much harder for others to copy. That’s the genetic code of a breakthrough.”
Step 2: Innovate the right things
Rather than hunting for new products, think about platforms. “In a connected economy platforms are what drive growth,” says Larry. “Learning to think about platforms instead of products immediately makes your problem statements more valuable.”
All the things people care about in the world - think Netflix, YouTube, eBay - connect and amplify. B2B platforms - Linux, SalesForce, Microsoft Office - do the same thing. They make it easy for people to do hard things.
Google is the most obvious example of this. Right from the beginning, Google was using 9 of the 10 types of innovation, and when mobile became prominent they added the tenth. And they continue to experiment: Google has created Tensor Processing Units, machine learning chips designed to work with their TensorFlow machine learning framework - and they give it all away for free.
Why? Because they see the inevitability of our need to access deep learning functions for things like real-time language translation (think Pixel earbuds). “They know they know how to do this stuff themselves,” says Larry, “but it’ll take them twenty years. Give it away, and they can do it in 10 months.”
Step 3: Be an innovation leader
“I get a call once a day from a company somewhere in the world who wants me to come and help them create a culture of innovation,” says Larry. “I tell them to just lie down until the feeling goes away, because that's not going to work.” For innovation to actually function you need innovation competency, not culture; and, you need to make it obligatory, not optional.
Larry has an 8-step approach for delivering innovation ROI at the enterprise level that will, as he puts it, “save you decades of misery”:
- Have a consistent way to define, measure and teach innovation, so that both the topic and the associated performance goals are unambiguous
- Periodically assess every unit, department, function, and program, so that you know where each stands in terms of innovation performance
- Incentivize senior executives to improve their innovation scorecards. Each business unit should have a yearly innovation scorecard. Use a combination of bonuses, awards, etc., to achieve deep commitment
- Senior executives should then identify and sponsor specific innovation initiatives designed to address key issues on their scorecards
- HR pros should work with heads of units and departments to identify high potential young people. These individuals drive the initiatives.
- Use disciplined protocols to help these teams succeed. Your tools must be smart enough to track all successes and failures over time.
- Document, share, and deepen the initiatives so that you get leverage across units and regions. Celebrate and reward teams and sponsors.
- Use partnering and open innovation methods to make your firm porous and lightweight. Use crowds and clouds wherever possible.
The overarching goal of innovation is to make the world better.
“It’s harder than you think. It’s weirder than you know. It’s not as fun and creative as people make it out to be,” says Larry. “But if you do it right, it’ll be the hardest and best work you ever do.”
