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Failure to Innovate is Evidence of Failed Leadership

Failure to Innovate is Evidence of Failed Leadership

by | Oct 8, 2020 | Leadership

When a business fails to innovate it is because executives fail to lead.

It is not because there is a lack of ideas

It is not because there aren’t enough resources

It is not because the market doesn’t support it.

It is because executives lack the courage to lead so they focus on being a “great” manager.

Now, before you get all upset about that truth bomb, let’s get clear on what two of the words used above — innovation and manager — mean

  • Innovation — Something different that creates value. Yes, it could be a new to the world widget. It could also be an improvement to an internal process. Trust me, employees have lots of ideas on how to improve things and many of those ideas require no resources. But they don’t speak up because they don’t see leaders, only managers.
  • Manager — Leaders set a vision and inspire people to follow them. Managers enforce the status quo and monitor and measure people’s performance. Leaders encourage debate, growth, and ambition. Managers demand compliance and repetition in pursuit of perfection. Leaders encourage curiosity and continuous improvement. Managers would rather live with a problem they understand than a solution they don’t. Organizations are filled with managers enjoying long and “successful” careers.

“Managers would rather live with a problem they understand than with a solution they don’t.” — John Bolton (my dad, not the ambassador)

One of the hazards of a career spent in innovation, as an intrapreneur and as a consultant, is that I’ve lost count of the number of innovation efforts I’ve been a part of. But I can tell you that none of the failures were due to a bad idea or a lack of resources or the absence of market opportunity. They were due to executives who didn’t have time to engage in and understand the process, who chose to allocate all resources to the core business, or who didn’t have the patience to invest in something now only to have their successor reap the rewards.

But I have worked with a few precious leaders who achieved great success.

Here’s what we can learn from the leaders.

Integrate leadership and innovation

One of my clients, the CHRO of a global pharma company, repeatedly points out, “every organization is perfectly designed to achieve the results it gets. If you don’t like the results, change the organization’s design.” Given that most organizations keep their innovation team separate from the group within HR that focuses on leadership development, we shouldn’t be surprised that true leadership is often absent in innovation.

“Every organization is perfectly designed to achieve the results it gets. If you don’t like the results, change the organization’s design.” — CHRO of a global pharma co.

We also shouldn’t be surprised that the CHRO mentioned above designed a “Leadership & Innovation” function within her company. She and her C-suite peers recognize that these two things are inextricably linked and thus they must organize to encourage and enable both. They’ve put top talent in place in the organization and brought in practitioners from other companies to encourage diverse thinking and approaches. And they’ve put innovation and leadership goals on everyone’s development plans because you don’t become a world-class innovator through wishes and words.

Immediately be of service

The most successful innovation organization that I’ve ever helped build started with a grand vision and a humble task list. The vision was to be a “moonshot factory” in which new business models could be created, incubated, and launched without fear of falling victim to the tyranny of the business’ daily demands. The humble task list for the first year was to assemble and monitor the company’s innovation portfolio — the IP, projects, and products in each silo that were drawing funds from the corporate innovation budget.

Portfolio management is not glamorous work and it’s even harder when it means shining a light on decisions and activities that have thrived in the dark. But the work immediately created value for the CEO, providing evidence that the company really was spending 95% of its innovation resources on incremental improvements and less than 5% on projects that would redefine the company and the industry.

With the CEO now endorsing the existence of the group, they had the license to expand their scope and start helping select innovation teams. Once they proved helpful to leaders of those teams, they could expand a bit more into establishing their own projects. Now, 7 years later, the organization team employs 200+ people and has launched or piloted nearly a dozen new businesses.

Help people break the right rules

I’m all for “ask forgiveness, not permission” but the fact is that some rules cannot and should not be broken. Some of the unbreakable rules are obvious, like laws and government regulations, but some aren’t. That’s where leaders come in.

When I was in brand management at P&G, leading the launch of Swiffer WetJet, I broke a lot of rules. I made sure to never surprise my boss and even asked for his input on which ones to break and how to break them.

Sometimes he would tell me how to break the rule, sometimes he would tell me to break it and he would cover me, and sometimes he would tell me that if I broke the rule I was on my own. He trusted me to never surprise him and to always make smart choices and I trusted him to have my back when he said he would.

You have a choice.

You can be a leader or you can be a manager.

Being a manger is safer and easier. You can have a very long and successful career just being a manager.

Being a leader can feel risky and difficult. But it’s the only way to to inspire and impact others and to drive the innovation and change that is so desperately needed.

What will you choose?

The 5 Gifts of Uncertainty

The 5 Gifts of Uncertainty

by | Sep 30, 2020 | Innovation, Leadership, Stories & Examples

“How are you doing?  How are you handling all this?”

It seems like 90% of conversations these days start with those two sentences.  We ask out of genuine concern and also out of a need to commiserate, to share our experiences, and to find someone that understands.

The connection these questions create is just one of the Gifts of Uncertainty that have been given to us by the pandemic.

Yes, I know that the idea of uncertainty, especially in big things like our lives and businesses, being a gift is bizarre.  When one of my friends first suggested the idea, I rolled my eyes pretty hard and then checked to make sure I was talk to my smart sarcastic fellow business owner and not the Dali Lama.

But as I thought about it more, started looking for “gifts” in the news and listening for them in conversations with friends and clients, I realized how wise my friend truly was.

Faced with levels of uncertainty we’ve never before experienced, people and businesses are doing things they’ve never imagined having to do and, as a result, are discovering skills and abilities they never knew they had.  These are the Gifts of Uncertainty

  1. Necessity of offering a vision – When we’re facing or doing something new, we don’t have all the answers. But we don’t need all the answers to take action.  The people emerging as leaders, in both the political and business realms, are the ones acknowledging this reality by sharing what they do know, offering a vision for the future, laying out a process to achieve it, and admitting the unknowns and the variables that will affect both the plan and the outcome.
  2. Freedom to experiment – As governments ordered businesses like restaurants to close and social distancing made it nearly impossible for other businesses to continue operating, business owners were suddenly faced with a tough choice – stop operations completely or find new ways to continue to serve. Restaurants began to offer carry out and delivery.  Bookstores, like Powell’s in Portland OR and Northshire Bookstore in Manchester VT, also got into curbside pick-up and delivery game.  Even dentists and orthodontists began to offer virtual visits through services like Wally Health and Orthodontic Screening Kit, respectively.
  3. Ability to change – Businesses are discovering that they can move quickly, change rapidly, and use existing capabilities to produce entirely new products. Nike and HP are producing face shields. Zara and Prada are producing face masks. Fanatics, makers of MLB uniforms, and Ford are producing gowns.  GM and Dyson are gearing up to produce ventilators. And seemingly every alcohol company is making hand sanitizer.  Months ago, all of these companies were in very different businesses and likely never imagined that they could or would pivot to producing products for the healthcare sector.  But they did pivot.
  4. Power of Relationships – Social distancing and self-isolation are bringing into sharp relief the importance of human connection and the power of relationships. The shift to virtual meetups like happy hours, coffees, and lunches is causing us to be thoughtful about who we spend time with rather than defaulting to whoever is nearby.  We are shifting to seeking connection with others rather than simply racking up as many LinkedIn Connections, Facebook friends, or Instagram followers as possible.  Even companies are realizing the powerful difference between relationships and subscribers as people unsubscribed en mass to the “How we’re dealing with COVID-19 emails” they received from every company with which they had ever provided their information.
  5. Business benefit of doing the right thing – In a perfect world, businesses that consistently operate ethically, fairly, and with the best interests of ALL their stakeholders (not just shareholders) in mind, would be rewarded. We are certainly not in a perfect world, but some businesses are doing the “right thing” and rea being rewarded.  Companies like Target are offering high-risk employees like seniors pregnant women, and those with compromised immune systems 30-days of paid leave.  CVS and Comcast are paying store employees extra in the form of one-time bonuses or percent increases on hourly wages.  Sweetgreen and AllBirds are donating food and shoes, respectively, to healthcare workers.  On the other hand, businesses that try to leverage the pandemic to boost their bottom lines are being taken to task.  Rothy’s, the popular shoe brand, announced on April 13 that they would shift one-third of their production capacity to making “disposable, non-medical masks to workers on the front line” and would donate five face masks for every item purchased.  Less than 12 hours later, they issued an apology for their “mis-step,” withdrew their purchase-to-donate program, and announced a bulk donation of 100,000 non-medical masks.

Before the pandemic, many of these things seemed impossibly hard, even theoretical.  In the midst of uncertainty, though, these each of these things became practical, even necessary.  As a result, in a few short weeks, we’ve proven to ourselves that we can do what we spent years saying we could not.

These are gifts to be cherished, remembered and used when the uncertainty, inevitably, fades.

Originally published on Mat 19, 2020 on Forbes.com

Why “Innovation” is Killing Innovation (Hint: it involves peanut butter and cats)

Why “Innovation” is Killing Innovation (Hint: it involves peanut butter and cats)

by | Sep 24, 2020 | Innovation, Tips, Tricks, & Tools

Innovation is not peanut butter.

You can’t smear it all over something and enjoy the deliciousness.

In other words, “Innovation” is not a one-sized-fits-all term.  If you apply it to everything new and different that you’re doing, you’ll be confused, frustrated, and ultimately left with very little to show for your efforts.

In a previous post, I defined Innovation as something different that creates value.  For companies to increase their odds of creating value, however, they need to develop a language and discipline around at least three different types of innovation.

Why do I need different types of innovation?

Imagine if we used the word “Cat” to describe every feline from a house-cat to a lion.  If you proudly proclaim that you just got a new cat, people might wonder whether that purchase was truly legal.  If you yell, “There’s a cat behind you!” people might not react with the level of urgency required.

Specificity enables rapid understanding which leads to better decision making.

Labeling everything new and different with the term “innovation” can result in dramatically under-resourcing some efforts and prematurely canceling others.  After all, launching an entirely new business model takes far more time, money, people, and patience than launching an improved version of an existing product.  You need a language that reflects that.  

Why do I need at least three types of innovation?

Because, after decades of research and application, academics and practitioners alike seem to agree that two is too few and, since three comes after two and three seems to work, you need at least three.  (Doblin said 10 but that feels like too many to remember).

Which three should I use?

The three that best reflect your company’s strategies, priorities, and culture.

I know that’s a bit vague, but the truth is that there is no one right answer.  The only “right answer” I’ve ever seen is the one that sticks, that advances key corporate strategies, and that enables thoughtful decision making.

Start Here

When one of my clients is at the very beginning of building their innovation capability, we start simple

  1. Core Innovation is improvements to what they currently do
  2. Adjacent refers to innovations which combine existing and new elements (e.g. selling an existing offering to a new customer, selling a new offering to an existing customer, or monetizing an existing offering in a new way)
  3. Breakthrough innovations change everything (e.g. new offerings to new customers, monetized and delivered in new ways)

We then develop a high-level innovation process that can apply to all three (this helps with communication across the company and reinforces that everyone can participate in innovation). From there, we create more detailed structures, processes, tools, trainings, and timelines for each type of innovation to ensure that we have a balanced innovation portfolio, allocate appropriate levels of resources, and set realistic expectations with regards to timelines and ROI.

But what about (fill in the framework here)?

Again, the two most important things about innovation types are that (1) you define them and (2) they are practical, actionable, memorable, and enable progress against your strategic priorities.

That said, there are other Innovation Type frameworks from which you can draw inspiration.  Here are three of the most popular

McKinsey’s 3 Horizons Making its debut in the 1998 book The Alchemy of Growth, McKinsey’s 3 Horizons frameworks remains a favorite amongst consultants and executives (but not Steve Blank, who thinks it no longer applies).

The book argued that for companies to kick-start growth or continue to grow rapidly, they need to simultaneously focus on three “horizons of growth:”

  1. Horizon 1 ideas drive continuous improvements in existing offerings, business models, and capabilities
  2. Horizon 2 ideas extend the core to new customers or markets
  3. Horizon 3 ideas create new capabilities or businesses in response to disruptive opportunities or threats

Clayton Christensen

In his 2014 Harvard Business Review article, “The Capitalist’s Dilemma,” Professor Christensen wrote that the terms he famously coined, “disruptive” and “sustaining” innovation, are not types of innovation, rather they describe “the process by which innovations become dominant in established markets and the new entrants challenge incumbents.” Innovation types, however, should describe the outcome of the innovation.  The three he identified are:

  1. Performance-improving innovations that replace old products with new better models
  2. Efficiency innovations that enable companies to sell existing products to existing customers at lower prices
  3. Market-creating innovations that combine an enabling technology that rapidly reduces costs with a new business model to reach new customers, resulting in the creation of (as the name implies) entirely new markets.

P&G

From 2000 through 2012, P&G, under the leadership of CEO AG Lafley,  improved its innovation success rate from 15% to 50% and doubled the average size of successful initiatives.

One of the first steps in achieving these dramatic results was to define 4 types of innovation.

  1. Commercial innovations that increase trial and use of existing products
  2. Sustaining innovations that make existing products better, faster, cheaper, or easier to use
  3. Transformational innovations that deliver a step-change improvement in a product’s performance, ultimately setting new performance expectations for a category
  4. Disruptive innovations (new brands or business models) that “win through simplicity or affordability”

 

OK, I’m on-board.  How do I start?

My clients and I follow these four steps:

  1. Put a stake in the ground and name 3 types of innovation. Don’t overthink it.  Just pick three types and go on to step 2
  2. Share the types (names and definitions) with people and see how they react. Do they immediately understand?  Do they look confused?  Do they recoil in horror?  Get curious about their reactions and ask for feedback.  Refine your types and their definitions until a majority of people immediately understand (note: you’re not going for 100% agreement because that never happens, you’re going for “good enough with no one violently disagreeing)
  3. Map your innovation initiatives to each type.
    • Are there types with no initiatives? Is that type critical to achieving a strategic priority or key metric?
      • If yes, you have a gap in your portfolio.
      • If no, get rid of the type.
    • Are there initiatives with no types? Is that initiative critical to achieving a strategic priority or key metric?
      • If yes, create a type to describe that (and hopefully other) initiatives.
      • If no, get rid of the initiative.
  4. Share your innovation portfolio with key decision-makers and start developing your innovation strategy.

 

Congrats, you have a working draft of your Innovation Types!  You’ve taken a crucial first step in your journey getting real results from innovation.  Reward yourself with some peanut butter!