Only 20% of R&D has any value, because most big firms lack a coherent approach to innovation, according to Curt Carlson, former CEO of SRI.
SRI is the company that has generated a continuous flow of high-value innovations, like Apple’s Siri, using an “innovation playbook.”
The goal of the playbook, known as NABC, is to generate clear and simple high-value propositions for innovation. It begins with arriving at a thorough understanding of the customer’s Need, before any significant development work is done. This is followed by clarifying the Approach to meet that need, spelling out the Benefits that would flow, and then figuring out how this compares with what Competitors can provide.
Although we now know how to implement consistent innovation, says Carlson, many large organisations are slow to demonstrate the leadership needed to change their legacy cultures and enable innovation to happen.
There are many reasons why innovation fails, including:
- 64% of leaders fail to back innovation projects (due to risk aversion)
- 40% of projects fall over due to turf wars
- 35% of the time failure is due to poor project implementation
Interestingly, a lack of ideas is not a common reason for innovation failure.
So, we are talking about leadership in a world with three characteristics:
1. A network of interdependent systems – which means there’s no one who can ultimately say ‘I am in charge’. Command and control is ineffective.
2. Problems are wicked or unstructured – which means expertise, including technical expertise, never has sufficient authority to base decisions on it.
3. The world is dynamic – the more everything is interrelated, the greater the likelihood of unexpected events that radically disrupt the decision-making process. Dynamism means that project management tools – a favourite among many engineers & technologists – do not work.
The more you think about it, the more you realise the challenge is not about leaders being the wellspring of innovation themselves, but rather being the facilitator of conditions that enable innovation to occur. In essence, this is a social challenge and so the question becomes, “how can leaders provide the social structures needed for innovation?”
When we discuss application of Everett Roger’s “innovation diffusion curve” (see below) with our clients in the context of facilitating change in their organisations, many of them smile and say that the populations distribution in their organisations are skewed towards the “laggards” tail.
This perception is rather like what is portrayed in the top left-hand corner of the diagram below by business design researcher Roger Martin – the “bureaucracy model” of the firm.
A systems thinking approach® is a critical framework for building innovation capacity in firms (read more via this link).
We operate on three premises for innovation when working with leaders seeking to address the issue of innovation performance:
First premise – a purposeful and systematic approach achieves the best results.
Innovation is the secret of constant growth; it is the road map to get to your “Future Business,” while still optimising “Today’s Business”. The notion of the ‘ambidextrous organisation’ also applies here, where more than 90% of ambidextrous organisations achieve their goals (see O’Reilly & Tushman, HBR April 2004)
Second premise – enterprise-wide innovation must be integrated with strategic management.
The systems thinking approach® highlights the causal relationship between strategic management and innovation, yielding several benefits:
- clearer strategic direction and better focus
- more effective strategic management
- greater value creation
- availability of more and better resources
- higher quality and quantity of innovation
Third premise – systems thinking provides the universal thinking framework and guide to your processes, structures, and tools that enable innovation.
Facilitating innovation at all organisational levels is essential. The question is, “what structures, processes, competencies, resources and culture are required to accomplish this?”
Learning to create processes that allow innovation to occur systemically and consistently over time requires concentrated support. In the same way that athletes enhance their performance through the assistance of a coach, leaders also have the option of calling on a coach to help you improve your team’s strategic and systems thinking skills.
Impact Innovation can upskill your team with the mindset and know-how to generate more than just ideas – we can help you create value from ideas with effective tools and systems. Call us on + 61 7 3041 1128 to talk about workshop and mentoring options.
– Dr Lewê Atkinson, Senior Associate & Haines Centre for Strategic Management Global Partner
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