Large organizations have been trying to become more innovative for years.

They’ve created new roles and implemented new programs. But very few of them have managed to generate real, tangible outcomes.

Some, however, have found success – and Ahi Gvirtsman has had a front-row seat. Since 2012, he has designed, built, and managed innovation programs for diverse types of organizations, including a Fortune 50 company covering 18,000 employees worldwide. His book The PEAK Innovation Principles offers a common framework that any type of organization in any industry can use to become innovation proficient.

According to Ahi, the solution to our innovation challenges is simple: we need to just start innovating. We sat down with Ahi ahead of his workshop at Innov8rs Tel Aviv to find out what’s stopping organizations from innovating successfully, how his PEAK principles help, and how innovation can improve not only organizations but the people who work in them.

Many people were excited when we announced Innov8rs Tel Aviv. Why is it such a special place for innovation?

A lot has been written about Israeli culture and what is called the ‘startup nation’. I think there’s something inherent about our character, our indifference to rules and regulations, our willingness to take risks and just try something even if people tried it before and failed, or even if it’s not the traditional thing to do – tradition here is more around religion as opposed to how things are done in areas such as business and industry, which is something that has encumbered innovation in other countries.

We just love to try stuff and see what happens. And I think this is what gives us, as a nation, this aura of innovative-ness.

Because we’re so new as a country, so young, it has let us become a busy and active hive of innovation, of startups, and led to the reputation we have as a country.

In terms of companies or industries or technologies, what is the latest thing that you see a lot of excitement around?

There’s a lot of buzz around our cyber industry. That is not something new. What I am excited about is that I’m seeing more and more investment recently in industries that are not the classic go-to places for high tech: water processing and the economies of water, agriculture and other industries like automotive that traditionally have not existed in Israel but now have a presence. I see a lot of activity around industries that are not solely software-oriented.

If our ability as a nation can help make global progress around serious issues – the accessibility of potable water, the availability of food – that would be a fascinating thing to experience and to witness. I feel very grateful to be able to be present in such an environment.

Tell me about your current role.

Essentially, it’s my job to come up with a way for my company, a global software vendor, to be innovative by definition, meaning that my focus is inward-facing in my company. And also the subject material that I talk about, the book that I wrote, my workshop, is focused on how large organizations can become innovative because today, innovation is a very ad-hoc experience. My company is around 18,000 employees worldwide. Even if you were originally a startup, when you grow beyond a certain size, when you became a mature company, you have work processes in place. You have optimization put in place.

That is what allows you to become efficient as an organization. You become profitable, you have a sustainable business over the course of a long period of time. But that also makes you very vulnerable because it causes stagnation in your ability to come up with new things.

If you read the seminal book “The innovator’s dilemma” by Christensen it talks about how large corporations find it really difficult to innovate because they’re so highly dependent on the existing work processes. So if I, for example, sell software to large organizations and I want to start selling software that individual developers buy, I have to acquire a new set of skills that I currently don’t have. And doing that in a large corporation is very difficult because when we innovate, we usually focus on the core competency of that organization.

If we look at a company that manufactures dairy products, let’s say, and there’s a new trend in the market of health food that is not based on dairy, that you use bacteria to create. They will find it very difficult to deal with such an opportunity because they don’t have the knowledge.

They do an innovation competition inside the organization and somebody comes up with an idea: we need to do an engineered food that is not dairy-based for people who are lactose intolerant. It will be very nutritious and it will keep us relevant for the next fifty years. Fantastic, that guy wins the competition. You tell him, go develop it. So he focuses on the R&D, he’ll probably focus on how to manufacture it. But then, even if they manage to create the product and can manufacture it – and let’s say that guy was persuasive enough to recruit an engineer who can convert the existing production lines of dairy products for this particular product – there’s still so many other functions in the organization that have to learn new skills that this project will probably fail.

Let’s say you need to market this to specialty stores. You need to hire a sales force that can sell to specialty stores. Or you need to develop the channel, it’s very expensive. You didn’t think about this in advance. So it’s a question of: are we willing to dedicate the resources for this? Are we willing to acquire the knowledge for this? This entire process is something organizations do not think about when they set out to create innovation. There are a lot of barriers along the way that organizations simply do not consider.

It’s a trend we see globally as well. There has been a lot of focus on these competitions or challenges, but then the real work starts and often there is no support, no confidence, no one really understands how to do it. Why do you think that is?

There’s a very basic belief that I have: In order to become innovative organizations must innovate. They have to perform innovation. It sounds like a tautology, right? It’s like a circular argument. But my point is that if you want to lose sixty pounds and become a triathlete, and currently you are a hundred pounds overweight, it’s not going to happen by hanging posters of triathletes in your room, or sitting all day, or simply believing you can become a triathlete. Inspiration isn’t enough. You have to get out of the house, you have to walk to the end of the street and come back. And then the next day, walk two blocks and come back, and then the next day, jog a little bit. You have to start doing stuff that’s going to get you to your goal.

My message to organizations is, stop over-thinking this. As long as we agree that our innovation experiments will be bound by the resources allocated to them and the time dedicated for their execution, you have nothing to lose.

What organizations often fear with my statement is: oh god, he’s telling us to spend millions and millions of dollars and if we fail, it’s going to be very painful. My answer to that is no: I ask you to run experiments, and I can help you define these experiments. If somebody has an idea, I’m saying okay, don’t build it. Let’s run an experiment. There’s the lean startup methodology, it’s very clear what can be done there. We bound the costs and the duration of the experiment, and you can run ten of those in parallel at any given moment in time. It’s not going to cost you a lot, you don’t have too much to lose, and you will learn. So even if you fail in the first two iterations and nothing will come out of it, you’ll have something in the third, or the fourth.

You need to continue trying and build your skill as an organization, because there are things that you will not know until you’ve tried. No matter how much you brainstorm and bring experts to advise you, nothing can surpass personal experience.

However, it’s very important to have somebody inside the organization that centralizes these efforts, documents the learning, keeps the community engaged and informed. We’re not talking about a single individual, or even a small team. You need a community of innovators that are spreading the word across the organization and allowing the various departments to run these experiments and keep the right context for managers, keep executives engaged.

I’m guessing your PEAK principles would help companies get started in the right way. Can you tell us a bit more about them?

The PEAK principles are about layers. One is: how do I manage a pipeline of experiments that is abundant, that is high quality? Another is: how do I address the individual projects? Because each one of them is different. Each one of them has its own challenges. Until we are able to change the culture – how people are measured, how people are compensated, how mid-level managers and executives perceive these experiments – the innovation team is going to have to intervene quite often in these projects. So you need to offer them stewardship, you need to make sure that they’re using the right methodologies and tools.

I use the analogy of innovation being like a nursery of plants. There’s a very big difference if the ground is properly watered and fertilized and taken care of, compared to when the ground is filled with salt. By default, this ground is filled with salt. You have to make sure that you fertilize it, meaning you have to make sure that people are measured based on innovation, as well as the mainline KPIs. You have to make sure that when they fail – and they will fail more than they will succeed, because that’s innovation by definition – not only are they not chastised for it, they’re actually celebrated for it, as long as it happened within the confines of your program and done in a responsible way using the right tools. You have to make sure that the environment helps you so that the more you do this, the less resistance you encounter.

In your experience, where does this resistance come from and how do you move past it?

Innovative ideas will make you feel very uncomfortable. Everybody tells you they want innovation. Every executive will tell you they want their company to be innovative. However, faced with a truly innovative idea, it’s a different story. If somebody comes up to a manager inside that dairy product company, for example, and says: I want to create a product that is based on bacteria, it’s not dairy, it’s really healthy. The mid-level manager will say: This is not our business, I can’t help you here.

I try to create an environment where that manager tells that employee to go to the innovation program. I’m not trying to break up the organization and rebuild it.

The existing workforces are what makes the organization what it is. I don’t want to break it, but I do want to create a safe environment that runs in parallel and integrates with the organization.

I’ll give you an example. Those managers, those decision makers, get full exposure to what is happening in the pipeline. But my ask from them is always very specific. I show them projects that could be relevant to them. I ask them: do you want me to run the experiment? If you do want me to run the experiment, you have to sponsor it, not necessarily with funding but with your attention. Because if this is successful, your business unit is probably going to be the one that’s proselytizing it and selling it.

I will not run an experiment if you’re not interested. And if you are interested, I want you engaged. I don’t want you to implement or build anything, because I’m responsible for an experiment. I set the boundaries of the experiment, and I make sure that you don’t lose too much money and that it doesn’t take too much time. So, we both understand the rules of engagement. Offering that clarity to managers allows them, over the course of time, to understand the format of the program, and be excited and interested in these experiments. They understand it doesn’t hold any sort of significant risk for them, and it actually creates opportunities to shine within the organization.

Because if you know lean startup, that experiment brings a lot of new data and information and allows them to say: okay, I see and I’m willing to take it to the next step. It’s always a very measured approach to innovation. We’re not going to go crazy.

Do you ever see the opposite, organizations wanting to move too quickly?

Yes, that is a pattern I see as well. I call it the big bet pattern. You have a strong leader that says: we have to innovate now, we have no time, we are losing the market, we’re becoming irrelevant. Come to me with proposals. And so you have the usual suspects, the CTOs and the Chief Engineers and the subject matter experts, coming in with their ideas. And of course, because it’s the CEO or somebody very senior, the chairman of the board or someone like that, these ideas have to be very aspirational, very big in scale and context. They’re very expensive, they’re very risky. And what I always say is, it’s fine, it’s a vision. But let’s start with smaller steps.

Because I see the big failures. Nobody, no CEO, comes out and says: we failed. I read statements about other organizations, what they’re going to do. They’re spending billions and then a few years later, you realize you never saw anything come out of those billions they invested. And they will never say: oh, that project? We killed it. No, it’s going to be killed in silence in some back room.

What I’ve seen many organizations is the team or teams who do experiments have no alignment with the rest of the organization. They don’t understand experiments, they don’t understand the philosophy and principles. But it sounds like that’s a core part of your model?

A lot of organizations go through experimentation in the subject matter. What I mean is, you would create a lab, and in that lab you would do all sorts of experiments on dairy products, and maybe other stuff. But it’s technical experiments. In my world, you could have a lab of people doing analytics. Right? In the automotive industry, you could have somebody playing around with types of engines. But it’s very inward looking types of experiments, technical experiments. And the problem often with these sorts of bodies is that they’re disjointed from the organization. They’re doing all those experiments but they’re not fully immersed in the other stuff that the organization does.

If I run an experiment, it’s a business experiment. The person who is going to sell this if it’s successful, the executive, has to be on board for the experiment to even begin. Now the experiment might have a technical aspect to it because if the core of my idea is some technical advancement, then I need to run it parallel, making sure that I can actually implement this breakthrough, and that there’s a market for it and I know how to exploit that market. Usually what happens is when organizations run experiments, it’s technical experiments, can we build it? But they don’t focus on should we build it. Would anybody care? Can we actually sell it? That business experimenting has to go hand-in-hand with the technical experimenting.

What is the takeaway that folks get after attending your workshop in Tel Aviv?

My workshop is an initial exposure to the PEAK principles. There are nine principles, and I’ll probably put more focus on about five of them because in the first 6-12 months of setting up an innovation program, there are five principles that you need to focus on. I don’t want to overwhelm the attendees, so it’s going to be very focused on what can you do in the first year, the first steps that you need to take. But I will cover all of them, explain every principle. I will ask the people attending to grade themselves and their organizations on a scale of 1 to 10, so they know the initial state they’re in. They’ll also be able to understand what they need to do in order to improve.

Organizations tend to be good in certain principles but not as good in others, and it changes between organizations. There are patterns that I see recurring. First of all, there are organizations that are doing nothing. Then there are organizations that focus on the festivities and the creativity, and the technical stuff. They do the technical experimentation, have a lab, have a team of what I call ivory tower innovation – people who dream about the future but are completely disjointed from the organization and lack the ability to execute. That’s the second pattern. And the third one is the big bet pattern which I mentioned. Each of these manifests itself differently on the PEAK principles, and I can identify that within an organization. Then based on the principles, they can begin implementing a comprehensive system that can help them become innovative.

And then they will, as you said, become innovative by innovating.

Yes. It’s a process, it takes time because you’re going through some sort of a culture change in your organization. But I can tell you that it’s highly worth the effort.

There’s another benefit that I don’t think gets talked about enough, but that I see all the time. Innovation can help you advance as an organization in your key KPIs, but there’s another element to this – the human element. I often tell a story about a guy in my organization who drove an innovation project. The program is highly dependent on entrepreneurs coming from within the workforce. This is what I really love about this system, by the way; it’s not about bringing hotshots from the outside, it’s letting your own employees become the entrepreneurs.

This person drove a project through this pipeline, and even though the project did not make it to production, he went through a huge personal transformation. The process gave him confidence to approach and talk to a woman that he was very interested in, and now they are engaged. He said he wouldn’t have approached her otherwise.

So when he was telling me that, I realized there was something a lot more profound going on. This personal experience of taking your idea to fruition by persuading executives, gaining more information, interviewing customers – going through that process of creating something out of nothing really empowers people.

And through a system like this, employees can gain life experiences that they would never get otherwise, and create a working environment that empowers people and enhances their personal development. And that really drives me. I want to help as many organizations as I can to adopt this model, because it will become a much improved workplace as a result.