The reasons for this shift are varied, but include:
- Consumers are demanding more disruptive products and services, often driven by technology, and business model advances. Small iterative improvements are no longer enough for companies to thrive.
- Insurgent “new economy” / unicorn organizations (e.g. Amazon, Spotify, AirBnB, etc.) recruit, retain and engage their employees in radically different, and often more impactful, ways than traditional businesses.
- Company valuations set by these “new economy” businesses are driving leaders of established corporates to reconsider their approach to developing new ideas.
- Of course, there are other influences, including the increasing prevalence of Design Thinking / Lean Startup approaches; employee’s desire to “own” the creation of innovative ideas; millennial employees’ expectations; adoption of new organizational design models (such as holocracy), etc.
Up to this point, innovative ideas were often sourced from employees, but are developed by teams of “experts” separated from the core organization and given the ability to experiment and act autonomously. While this is often a suitable development model (especially for the most disruptive ideas), it limits the ability to scale capacity to develop new thinking. It fails to build a culture of innovation and doesn’t set the right “innovation ownership” message for employees in the core organization.
Further, separating these innovation skills on the edge of the organization sends a terrible message for employees who remain in the core, where they are given little chance to experiment, or drive the development of new ideas (often their own). This builds resistance to supporting new ideas if / when they need to integrate with the core organization’s resources.
In response, innovation leaders are working with functional Business Unit and Corporate leadership to implement actions that broadly support and encourage experimentation (and often parallel approaches around autonomy) as a defined skill for all levels of an organization. Some examples include:
- Training employees around experimental methodologies, such as Lean Startup, which encourages users to generate and test new ideas
- Developing and promoting channels to source / review new ideas by employees, giving the originating employees a chance to develop their ideas once approved (where appropriate)
- Build internal communication channels, to increase awareness of new technology / business trends impacting the organization, inspire new ideas, and reward / recognize employees for their innovative achievements
- Once established and delivering results, this approach can shift focus to external stakeholders, often initially focused on recruitment efforts or in broader marketing initiatives (may be more relevant to B2B environments).
- These efforts can also be used to address the downside of experimentation, such as promoting “contained failures” and encourage learnings from the experience.
- Encourage career development processes that are built around the skills of experimentation / autonomy
- This also can move into the recruitment processes, to change the profile of who is accepted into the organization.
- Developing purpose statements that are aligned with social missions and support a more open and flexible work environment.
There are a range of established organizations following this approach. Nike has an integrated training / channel / reward / recognition approach to supporting employee experimentation in day-to-day roles. Innovative activity is mandated for all employees and rewarded by leadership, even in (qualified) failure situations. Interestingly, Adidas have a similar approach.
For several years Pfizer has been supporting a team of innovation champions who are highly skilled in a proprietary Design Thinking methodology called “Dare to Try.” These individuals retain regular jobs, but are encouraged to apply a DT approach to issues in their relevant business units. Ideas generated from these efforts are then tracked / promoted through a centralized reporting function, justifying the program investment.
While experimentation and autonomy efforts at some organizations are already well established, others are just starting on this journey. The reality is that every corporate innovation leader should be working to build more experimental, ownership culture. As we head further into a radically disrupted economy, there is no other choice.
Let me know if you agree / disagree with any of the above points, or would like to discuss your efforts.
This article was originally published in Innovation Management.