Tag Archives: Innovation Culture

You Can’t Innovate Without This One Thing

You Can't Innovate Without This One Thing

GUEST POST from Robyn Bolton

It just landed on your desk. Or maybe you campaigned to get it. Or perhaps you just started doing it. How the title of “Innovation Leader” got to your desk doesn’t matter nearly as much as the fact that it’s there, along with a budget and loads of expectations.

Of course, now that you have the title and the budget, you need a team to do the work and deliver the results.

Who should you look for? The people that perform well in the current business, with its processes, structures, and (relative) predictability, often struggle to navigate the constant uncertainty and change of innovation. But just because someone struggles in the process and structure of the core business doesn’t mean they’ll thrive creating something new.

What are the qualities that make someone a successful innovator?

70 answers

A lot of people have a lot to say about the qualities and characteristics that make someone an innovator. When you combine the first four Google search results for “characteristics of an innovator” with the five most common innovation talent assessments, you end up with a list of 70 different (and sometimes conflicting) traits.

The complete list is at the end of this article, but here are the characteristics that appeared more than once:

  1. Curious
  2. Persistent
  3. Continuously reflective
  4. Creative
  5. Driven
  6. Experiments
  7. Imaginative
  8. Passionate

It’s a good list, but remember, there are 62 other characteristics to consider. And that assumes that the list is exhaustive.

+1 Answer

It’s not. Something is missing.

There is one characteristic shared by every successful innovator I’ve worked with and every successful leader of innovation. It’s rarely the first (or second or third) word used to describe them, but eventually, it emerges, always said quietly, after great reflection and with dawning realization.

Vulnerability.

Whether you rolled your eyes or pumped your fist at the word made famous by Brene Brown, you’ve no doubt heard it and formed an opinion about it.

Vulnerability is the “quality or state of being exposed to the possibility of being attacked or harmed, either physically or emotionally.”  Without it, innovation is impossible.

Innovation requires the creation of something new that creates value. If something is new, some or all of it is unknown. If there are unknowns, there are risks. Where there are risks, there is the possibility of being wrong, which opens you up to attack or harm.

When you talk to people to understand their needs, vulnerability allows you to hear what they say (versus what you want them to say).

In brainstorming sessions, vulnerability enables you to speak up and suggest an idea for people to respond to, build on, or discard.

When you run experiments, vulnerability ensures that you accurately record and report the data, even if the results aren’t what you hoped.

Most importantly, as a leader, vulnerability inspires trust, motivates your team, engages your stakeholders, and creates the environment and culture required to explore, learn, and innovate continuously.

n + 1 is the answer

Just as you do for every job in your company, recruit the people with the skills required to do the work and the mindset and personality to succeed in your business’ context and culture.

Once you find them, make sure they’re willing to be vulnerable and support and celebrate others’ vulnerability. Then, and only then, will you be the innovators your company needs.


Here’s the full list of characteristics:

  1. Action-oriented, gets the job done
  2. Adaptable
  3. Ambitious
  4. Analytical, high information capacity, digs through facts
  5. Associative Thinker, makes uncommon connections
  6. Breaks Boundaries, disruptive
  7. Business minded
  8. Collaborative
  9. Compelling Leader
  10. Competitive
  11. Consistent
  12. Continuously reflects (x3)
  13. Courageous
  14. Creative (x3)
  15. Curious (x4), asks questions, inquisitive, investigates
  16. Delivers results, seeks tangible outcomes
  17. Disciplined
  18. Divergent Thinker
  19. Driven (x3)
  20. Energetic
  21. Experiments (x2)
  22. Financially oriented
  23. Flexible, fluid
  24. Formally educated and trained
  25. Futuristic
  26. Giving, works to benefit others, wants to make the world better
  27. Goal-oriented
  28. Has a Growth mindset
  29. Highly confident
  30. Honest
  31. Imaginative (x2)
  32. Influential, lots of social capital
  33. Instinctual
  34. Intense
  35. Iterating between abstract and concrete thinking
  36. Learns through experiences
  37. Likes originality, seeks novelty
  38. Loyal
  39. Motivated by change, open to new experiences
  40. Networks, relates well to others
  41. Observes
  42. Opportunistic mindset, recognizes opportunities
  43. Opportunity focused
  44. Passionate (x2)
  45. Patient
  46. Persistent (x4)
  47. Persuasive
  48. Playful
  49. Pragmatic
  50. Proactive
  51. Prudent
  52. Rapidly recognizes patterns
  53. Resilient
  54. Resourceful
  55. Respects other innovators
  56. Seeks understanding
  57. Self-confident
  58. Socially intelligent
  59. Stamina
  60. Takes initiative
  61. Takes risks
  62. Team-oriented
  63. Thinks big picture
  64. Thrives in uncertainty
  65. Tough
  66. Tweaks solutions constantly
  67. Unattached exploration
  68. Visionary
  69. Wants to get things right
  70. Willing to Destroy

And the sources:

Image Credit: Pixabay

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Time for Innovation Excellence

Time for Innovation Excellence

GUEST POST from Norbert Majerus and George Taninecz

Lean manufacturing and the Toyota Production System started an industrial revolution (at least for those who adopted it). Transformative events that began in the automotive industry spread into many other sectors (including healthcare, finance, even innovation). However, the term “lean” may not have been the best description for what was occurring then or now.

Lean implies removing things, such as waste, which is an accurate description of a key lean tool. But lean but fails to address many other aspects of what we now know about this improvement method. Today the scope of most improvement transformations goes far beyond what was originally defined as “lean” and/or “continuous improvement.”

So, what should we call the current and future states of businesses that develop superior processes and a continuous improvement culture to become the best companies possible? I don’t know exactly who first introduced the term “excellence” but it’s all-encompassing nature of superiority certainly applies to what is going on in some — but not many — organizations.

For example, very few companies have attempted to apply excellence to innovation. Yet I started this transformation in the three Goodyear Innovation centers in 2006. In 2016, the Innovation Center in Akron, Ohio, received the AME Excellence Award, proving that innovation excellence works and that Goodyear got the right results from the transformation. The application of excellence to an innovation process delivers corporate results that go far beyond the cost savings traditionally achieved by focusing improvements on manufacturing. Innovation excellence moves both the top and bottom lines of companies as a larger number of new products and services are more quickly and efficiently delivered to customers, creating market advantages that are difficult for competitors to replicate.

So, what is “innovation excellence”? It is the implementation of a superior innovation system and the simultaneous creation of an innovation culture. The cultural part assures the continuous improvement of the system and its sustainability.

The innovation system includes processes and features like:

  • An agile risk management system that allows rigorous review of an abundance of new ideas at high speed and low cost
  • A superior knowledge management and technology development process
  • A cost-efficient mass design process
  • Lean principles to achieve perfect delivery, with much higher speed and lower costs

The characteristics of a culture of innovation are based on some well-known, lean people principles as well as change-management concepts that allow an organization to foster creativity and risk-taking:

  • Respect and care for people
  • Engagement and empowerment of all associates and stakeholders
  • Humble leadership
  • Change behaviors to change beliefs
  • The removal of fear at all levels
  • Allowing people to experiment effectively and efficiently
  • The right strategy and reward system

Although it is relatively easy to describe processes and systems, it’s hard to describe behaviors and cultural needs. Text definitions and bulleted lists often fail to describe the challenges of this type of work. I found that the most effective way to do that is by observation. Many executives think you must observe perfect behaviors at other companies and then try to apply them in their own; they forget that you can observe them (or the lack thereof) during gemba walks at their own company. First, you gain a technical understanding about your operations that isn’t possible from behind an office desk. By humbly watching and talking with the workforce, you also impart a sense of genuine interest and a willingness to support. Earnestly engaging individuals, asking sincere questions, and really listening to what’s said offers tremendous insight into a company’s culture and why — or why not — actions necessary to achieve excellence are being pursued.

I always devote significant time to “people transformation” in every presentation and workshop I teach on innovation excellence. I do this with stories and descriptions of real or invented characters, which I’ve learned are very popular with my audiences and tend to get the message across. They also give people enough of an understanding and motivation to change on their own.

Over the years I also learned to supplement the stories and descriptions with genuine emotions and feelings because they are at the core of change management. I’ve lived through all of this — the good and bad of cultural transformations — and I’ve felt the highs and lows that inevitably occur. That’s one of the reasons why George Taninecz and I wrote Winning Innovation as a business novel. The format has allowed us to show a cultural change coming alive and how the emotions, feelings, and actions of characters evolve along the way — eventually helping a company achieve innovation excellence.

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3 Ways to Get Customer Insights without Talking to Customers

3 Ways to Get Customer Insights without Talking to Customers

GUEST POST from Robyn Bolton

Most of my advice to leaders who want to use innovation to grow their businesses boils down to two things*:

  1. Talk (and listen) to customers
  2. Do something

But what if you don’t want to talk to customers?

After all, talking to customers can be scary because you don’t know what they’ll say. It can be triggering if they say something mean about your product, your business, or even you as a person. It can be draining, especially if you’re an introvert.

Plus, there are so many ways to avoid talking to customers – Send a survey, hire a research firm to write a report, invoke the famous Steve Jobs quote about never doing customer research.

Isn’t it just better to stay tucked away in the office, read reports, state opinions as if they are facts (those opinions are based on experience, after all), and make decisions?

Nope.

It is not better. It is also not safer, easier, or more efficient.

To make the best decisions, you need the best data, which comes from your customers.

But that doesn’t mean you need to talk to them to get it.

The best data

The best data helps you understand why your customers do what they do. This is why Jobs to be Done is such a powerful tool – it uncovers the emotional and social Jobs to be Done that drive our behavior and choices (functional Jobs to be Done are usually used to justify our choices).

But discovering Jobs to be Done typically requires you to talk to people, build rapport and trust in a one-on-one conversation, and ask Why? dozens of times so surface emotional and social JTBD.

Luckily, there are other ways to find Jobs to be Done that don’t require you to become an unlicensed therapist.

Observe your customers

Go where your customers are (or could be) experiencing the problem you hope to solve and try to blend in. Watch what people are doing and what they’re not doing. Notice whether people are alone or with others (and who those others are – kids, partners, colleagues, etc.). Listen to the environment (is it loud or quiet? If there’s noise, what kind of noise?) and to what people are saying to each other.

Be curious. Write down everything you’re observing. Wonder why and write down your hypotheses. Share your observations with your colleagues. Ask them to go out, observe, wonder, and share. Together you may discover answers or work up the courage to have a conversation.

Quick note – Don’t be creepy about this. Don’t lurk behind clothing racks, follow people through stores, peep through windows, linger too long, or wear sunglasses, a trench coat, and a fedora on a 90-degree day, so you look inconspicuous. If people start giving you weird looks, find a new place to people-watch.

Observe yourself

Humans are fascinating, and because you are a human, you are fascinating. So, observe yourself when you’re experiencing the problem you’re hoping to solve. Notice where you are, who is with you, the environment, and how you feel. Watch what you do and don’t do. Wonder why you chose one solution over another (or none).

Be curious. Write down everything you did, saw, and felt and why. Ask your colleagues to do the same. Share your observations with your colleagues and find points of commonality and divergence, then get curious all over again.

Quick note – This only works if you have approximately the same demographic and psychographic profiles and important and unsatisfied Jobs to be Done of your target customers.

Be your customer

What if your business solves a problem that can’t be easily observed? What if you don’t have the problem that your business is trying to solve?

Become your customer (and observe yourself).

Several years ago, I worked with a client that made adult incontinence products. I couldn’t observe people using their products, and I do not have important (or unsatisfied) Jobs to be Done that the products can solve.

So, for one day, I became a customer. I went to Target and purchased their product. I went home, wore, and used the product. I developed a deep empathy for the customer and wrote down roughly 1 million ways to innovate the product and experience.

Quick note – Depending on what’s required to “be your customer,” you may need to give people a heads up. My husband was incredibly patient and understanding but also a little concerned on the day of the experiment.

It’s about what you learn, not how you learn it

It’s easy to fall into the trap of thinking there is one best way to get insights. I’m 100% guilty (one-on-one conversations are a hill I have died on multiple times).

Ultimately, when it comes to innovation and decision-making, the more important thing is having, believing, and using insights into why customers do what they do and want what they want. How you get those insights is an important but secondary consideration.

* Each of those two things contains A TON of essential stuff that must be done the right way at the right time otherwise, they won’t work, but we’ll get into those things in another article

Image Credit: Pixabay

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Reset and Reconnect in a Chaotic World

Reset and Reconnect in a Chaotic World

GUEST POST from Janet Sernack

Meeting face to face, for a lovely lunch recently, with a coaching colleague, we were both shocked to discover how stressed and anxious we were feeling about being asked to deliver live workshops and face-to-face coaching to clients once again.

We shared how emotionally, mentally, and physically overwhelmed we felt, despite having decades of knowledge, experience, and skills in being able to deliver deep learning programs and face-to-face coaching sessions, about doing live gigs again! We also agreed, that despite the range of largely effective emotionally intelligent coping strategies we developed to help ourselves and our clients self-regulate, self-manage, to better adapt to the pandemic-imposed work-from-home restrictions that the past two and half years of working, alone, and in isolation, online, had taken its toll.

We acknowledged and accepted that we along with many of our clients were all suffering from elevated levels of stress, discomfort, and anxiety. We then agreed that it was time to focus on exploring how to better help ourselves and our clients reconnect and reset by enabling them to create states of well-being, emotional agility, and mental fitness, where they can feel good, can function well, and be effective and innovative in an increasingly chaotic world.

To seek new ways of enabling ourselves and our clients to deal effectively with a range of unresourceful feelings including helplessness, powerlessness, and fearfulness about an uncertain future. 

We noticed that these feelings often caused many of our clients to contract and freeze, and become immobilised as a result of what we describe as a “bubble” of self-induced silo-based behaviours. That often evolved into extreme self-centeredness, and unconscious selfishness, which ultimately increased their feelings of isolation and loneliness, and lack of belonging, resulting in defensive and avoidant behaviours, in what is becoming an increasingly chaotic world.

How are these ways of being and acting impacting organisations?

Partnering in a wide range of online global coaching sessions, we noticed that a number of common trends emerged as to how our client’s teams and organisations, are being impacted at the cultural level:

  • Immobilization – many people are unable to self-manage their work from home workloads and are quietly burning out, through being overly task-focused and busy, whilst others are preferring to work autonomously, and not waste hours commuting.
  • Lacking safety and trust – many organisations are freezing all of their change initiatives, learning programs, and projects, causing people to fear loss and overall job insecurity, where many people are contracting more deeply within their “bubbles” and become even more distrustful of leadership and even more passively defensive and avoidant.
  • Lacking clarity and foresight – many organisations have slipped into being so reactive, focussing only on delivering short-term results, and are not communicating a clear strategy for leading the way forwards.

Resulting in:

  • Increased resistance to change and going back to the office adds to people’s inertia, and to their sense of disconnection and lack of belonging.
  • Increased risk adversity and conventional (cost cutting), tactical and short-term focus, inhibits any investment in Research and Development or the skills development required in developing and executing a future innovation strategy.
  • People have become even more fearful of failure, and are not stretching themselves to adapt, grow, learn and innovate with disruption, and often choosing to merely change jobs, in a competitive job marketplace, driven by scarcity, as a perceived short term solution.

A unique moment in time

This has created an opportunity, in this unique moment in time, to focus on being kinder to ourselves and to others by helping and supporting each other, respectfully and compassionately, creatively and courageously, to reconnect and reset. Despite rising levels of economic, civic, and social uncertainty and unrest.

What made sense yesterday may not make so much sense today.

Many of the mental models we applied yesterday may not be relevant for tomorrow because corporate culture, civic and social structures have drastically changed and digitalization has become commonplace, noting that we are shifting from a VUCA to BANI world where:

  • Brittle has replaced Volatility.
  • Anxiety reflects Uncertainty.
  • Non-linearity is an addition to Complexity.
  • Incomprehensibility is ultimately the consequence of our non-linear world and goes one step further than Ambiguity.

Paradoxically, this has created new openings to genuinely explore and discover new thresholds to adapt, generate new mindsets, develop skill sets, and power up our toolkits to keep pace with the effects of the emerging BANI world and capture complex systems by asking a  key generative or catalytic question:

How might you support and enable others to think and act differently in such a world, where old patterns seem to crumble while new ideas and systems still need to be created, invented, innovated, and established?

As the world of work changes, so does the need for everyone to consider how to be more open-hearted, minded, and willed with one another.

A final word from Gallop CEO Jon Preston in the Gallop Global Emotions Report:

“All over the world, people are trying to understand the rise of violence, hatred, and increased radicalization. They will continue to argue over what the best policy responses should be and what role social media plays in fueling negative emotions.

However, policymakers must understand why so many more people are experiencing unprecedented negative emotions and focus on the drivers of a great life.

Our shared humanity and wellbeing depend on it”.

When we generously and kindly demonstrate care, respect, and appreciation for the value everyone brings, we can also demonstrate helpfulness and support, through our unconditional willingness to reconnect and reset.

Resulting in an ability to co-create a better sense of belonging and a more optimistic outlook, through enhancing our emotional intelligence.  To effectively self-regulation and self-manage the superpowers and strategies required to thrive, flourish and flow, and make transformational changes in the face of relentless uncertainty, disruption, and a chaotic world.

This is the first in a series of three blogs on the theme of reconnecting and resetting, to create, invent and innovate in an increasingly chaotic world. You can also register for our free 45-minute masterclass on Thursday, 25th August, to discover new ways of re-connecting through the complexity and chaos of dis-connection to create, invent and innovate in the future! Find out more.

Image credit: Pixabay

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Why Data-Based Decisions Will Lead You Straight to Hell

Why Data-Based Decisions Will Lead You Straight to Hell

GUEST POST from Robyn Bolton

Many years ago, Clay Christensen visited his firm where I was a partner and told us a story*.

“I imagine the day I die and present myself at the entrance to Heaven,” he said. “The Lord will show me around, and the beauty and majesty will overcome me. Eventually, I will notice that there are no numbers or data in Heaven, and I will ask the Lord why that is.”

“Data lies,” the Lord will respond. “Nothing that lies can be in Heaven. So, if people want data, I tell them to go to Hell.”

We all chuckled at the punchline and at the strength of the language Clay used (if you ever met him, you know that he was an incredibly gentle and soft-spoken man, so using the phrase “go to Hell” was the equivalent of your parents unleashing a five-minute long expletive-laden rant).

“If you want data, go to Hell.”

Clay’s statement seems absolutely blasphemous, especially in a society that views quantitative data as the ultimate source of truth:

  • “In God we trust. All others bring data.” W. Edward Deming, founding Father of Total Quality Management (TQM)
  •  “Above all else, show the data.” – Edward R. Tufte, a pioneer in the field of data visualization
  • “What gets measured gets managed” – Peter Drucker, father of modern management studies

But it’s not entirely wrong.

Quantitative Data’s blessing: A sense of safety

As humans, we crave certainty and safety. This was true millennia ago when we needed to know whether the rustling in the leaves was the wind or a hungry predator preparing to leap and tear us limb from lime. And it’s true today when we must make billion-dollar decisions about buying companies, launching products, and expanding into new geographies.

We rely on data about company valuation and cash flow, market size and growth, and competitor size and strategy to make big decisions, trusting that it is accurate and will continue to be true for the foreseeable future.

Quantitative Data’s curse: The past does not predict the future

As leaders navigating an increasingly VUCA world, we know we must prepare for multiple scenarios, operate with agility, and be willing to pivot when change happens.

Yet we rely on data that describes the past.

We can extrapolate it, build forecasts, and create models, but the data will never tell us with certainty what will happen in the future. It can’t even tell us the Why (drivers, causal mechanisms) behind the What it describes.

The Answer: And not Or

Quantitative data Is useful. It gives us the sense of safety we need to operate in a world of uncertainty and a starting point from which to imagine the future(s).

But, it is not enough to give the clarity or confidence we need to make decisions leading to future growth and lasting competitive advantage.

To make those decisions, we need quantitative data AND qualitative insights.

We need numbers and humans.

Qualitative Insight’s blessing: A view into the future

Humans are the source of data. Our beliefs, motivations, aspirations, and actions are tracked and measured, and turned into numbers that describe what we believed, wanted, and did in the past.

By understanding human beliefs, motivations, and aspirations (and capturing them as qualitative insights), we gain insight into why we believed, wanted, and did those things and, as a result, how those beliefs, motivations, aspirations, and actions could change and be changed. With these insights, we can develop strategies and plans to change or maintain beliefs and motivations and anticipate and prepare for events that could accelerate or hinder our goals. And yes, these insights can be quantified.

Qualitative Insight’s curse: We must be brave

When discussing the merit of pursuing or applying qualitative research, it’s not uncommon for someone to trot out the saying (erroneously attributed to Henry Ford), “If I asked people what they wanted, they would have said a horse that goes twice as fast and eats half as much.”

Pushing against that assertion requires you to be brave. To let go of your desire for certainty and safety, take a risk, and be intellectually brave.

Being brave is hard. Staying safe is easy. It’s rational. It’s what any reasonable person would do. But safe, rational, and reasonable people rarely change the world.

One more story

In 1980, McKinsey predicted that the worldwide market for cell phones would max out at 900,000 subscribers. They based this prediction on solid data, analyzed by some of the most intelligent people in business. The data and resulting recommendations made sense when presented to AT&T, McKinsey’s client.

Five years later, there were 340,213 subscribers, and McKinsey looked pretty smart. In 1990, there were 5.3 million subscribers, almost 6x McKinsey’s prediction.   In 1994, there were 24.1M subscribers in the US alone (27x McKinsey’s global forecast), and AT&T was forced to pay $12.6B to acquire McCaw Cellular.

Should AT&T have told McKinsey to “go to Hell?”  No.

Should AT&T have thanked McKinsey for going to (and through) Hell to get the data, then asked whether they swung by earth to talk to humans and understand their Jobs to be Done around communication? Yes.

Because, as Box founder Aaron Levie reminds us,

“Sizing the market for a disruptor based on an incumbent’s market is like sizing a car industry off how many horses there were in 1910.”

* Except for the last line, these probably (definitely) weren’t his exact words, but they are an accurate representation of what I remember him saying

Image Credit: Pixabay

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Leading a Culture of Innovation from Any Seat

3 Ways to Leverage Human-Centered Design at Your Organization

Leading a Culture of Innovation from Any Seat

GUEST POST from Patricia Salamone

In a world where business challenges are increasingly complex, identifying your objective and framing your problem correctly is an integral way to demonstrate leadership and ensure teams don’t inadvertently solve the wrong problem. This is where a Human-Centered Design (HCD) mindset comes in—providing a groundbreaking way to define and ensure teams are focused on the right objective.

First, consider the challenge and objectives.

Not all business challenges need to be completely reimagined. Before jumping back to the drawing board, ask yourself, is there an obvious answer? Is there a clear approach to finding a solution? Can the team define what isn’t right? If you can’t say yes to these questions, then your business can benefit from the application of HCD principles. While teams understand they need to align and reframe challenges, having the proper tools in place is where many teams can fall short.

Move past traditional methods and be inspired to see challenges by taking a step back to reframe the problem:

  • Align the team. Often, internal teams will have differing viewpoints on a business problem. Rather than seeing this as a barrier, cross-functional alignment can open the door for creativity and new ideas.
  • Keep the focus on the issue. It’s often tempting to jump from “we have a problem” to, “here’s what we should do.” Instead, keep digging deeper. For every apparent problem definition, ask, “why does that matter?” multiple times, enabling yourself to get to the root cause and ensure you’re focusing on the “problem” rather than a “symptom of the problem.”
  • Use different words to reframe. Next time your team states a problem, challenge everyone to restate it using different words. Each iteration can reveal new facets of the problem, bringing clarity to the challenge at hand.
  • Zoom out. Rather than using a microscope to see details that aren’t immediately visible, approach the problem from a broader, more abstract perspective. Look at the customer’s “job to be done,” rather than what they may say their challenge is. This enables a more holistic and pragmatic view.

By making problem-reframing a habit, you are opening your organization up to greater flexibility and new pathways for innovation. This method also has the added benefit of clarifying gaps in knowledge and revealing where additional customer insight is needed.

Make empathy a daily habit.

A core principle of HCD is that empathy must permeate every aspect of traditional research initiatives. Simply seeking customer feedback to develop strategies often leads to insular thinking. While a research project-driven mindset is very much the norm, empathy in an HCD context is much more than that, it must permeate every aspect of the work.

Similar to reframing challenges, it is imperative to listen and learn from customer stories and perspectives. Here are some ways to establish daily habits and build stronger relationships with your customers.

  • Advocate for the customer’s voice in team meetings. Always begin by asking questions like, “how would our customers feel about this?”
  • Socialize existing wisdom within an HCD team on a weekly basis. This could look like emails containing important insights or bringing in a small group of clients together for “speed dating” with stakeholders to gain a human understanding of your customers’ experiences, wishes, and pain points.
  • Obtain real-time feedback. Online research communities can enable on-demand responses to explore fuzzy, front-end ideas, rapidly iterate on new product concepts, or gather deep insights into how your customers use a product post-launch.

Apply an agile mindset.

One of the hallmarks of HCD is agility. But being agile isn’t just about being “fast,” it’s about delivering value as efficiently as possible. In practice, an agile mindset means thinking differently about how your work gets done and the ways in which a team can break through functional silos.

Not sure where to begin? Here are some tactics to get you started:

  • Break up the work of the team into two-week sprints. Define what can be done in those two weeks and create measurable goals to work toward them (even if those outcomes are only intermediate steps toward a bigger goal).
  • Commit to short and frequent stand-ups with your team to share commitments and highlight possible hurdles to accomplishing the goals of the current sprint.
  • Portion out deliverables. Rather than focusing on your next big presentation as your deliverable, think about how you can break your work down and deliver portions of that content to your stakeholders sooner in a more informal way.

While the above suggestions are purely jumping-off points, they serve as solid examples of practical ways you can begin to transition from understanding HCD as a concept to it becoming an enabler of rethinking both your own work, as well as becoming a catalyst to higher-performing teams.

At the end of the day, embracing the principles of HCD is a long-term journey. These proven steps will help you lead and inspire teams to begin developing new habits that quickly demonstrate the strong potential HCD has in creating a new way to see innovation through the eyes of your customers.

Image credit: Pixabay

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Surfacing Your Hidden Assumptions

Successful strategy and innovation are about how fast you can become aware of your assumptions.

Surfacing Your Hidden Assumptions

GUEST POST from Soren Kaplan

When it comes to strategy and innovation, success depends on how fast you become aware of your assumptions and then modify them. But it’s a paradox:  You can’t see your most fundamental assumptions until you overcome them. This means that you can only understand your mindsets that were barriers retrospectively.

Let’s look at how this works. I have a quick story for you, then a question.

A bus driver was heading down Van Ness Avenue in my hometown of San Francisco. He went through a stop sign without even slowing down, then turned onto a one-way street going the opposite direction as the rest of the traffic. A police officer saw the whole thing but he didn’t stop him or issue a ticket because no laws had been broken. The question for you is this: How can this scenario be possible?

If you answered that the bus driver was walking down the street, you are correct. This is a very simple example to illustrate how we all make assumptions. Most people just assume that a bus driver is always driving a bus. But of course, that’s not the case. The most important part of this exercise isn’t to point out that an assumption may have been made in the first place – it’s only natural to do so. It’s to show that most of us only recognize that we’ve made an assumption after we’ve discovered that our thinking was invalid or that it led us astray. And by then, it can often be “too late.”

Let’s go back to the bus driver for a moment. What if I had framed things up in the scenario a little differently and included another statement up front that said “In San Francisco, people use cars, take the bus, or walk down the street to get where they’re going.”  How would this have impacted your assumptions? For most people, the idea that it’s possible the bus driver could be walking down the street would have been planted in their brains as they read the rest of the scenario – and they would have more easily overcome their limiting assumption that bus drivers only drive buses. The goal is to continually broaden your perspective so that you can overcome your assumptions before they limit your options or slow you down.

Here are a couple of tried and true approaches I’ve used to challenge and expand mindsets.

Identify Areas of Intrigue

When it comes to developing your strategy or innovating, get clear on what you need to know and learn. List up to 4-5 topics. Examples might include things like board games children like most, the healthiest yet best tasting desserts, or the most successful social media influencers. For each topic, create a list of guiding questions that, if answered, would really give you a solid understanding of the area. For instance, using the board games children like mostexample, you could come up with questions like: What are the most popular children’s board games? How long do the best games take to play? Do adults usually play with the children? What does it take to win? This exercise will help you better understand what’s most important to further explore so you can broaden your perspective.

Adapt a Business Model

Find a company completely outside of your industry or market and look at what makes them different and what they do really well.  Then adapt their model to your cause.  Use the format “I want to be the ____________ of ____________” by putting a company name into the first blank and the area of your target market or innovation area into the second blank.  For example, if you want to transform the fashion industry, you might try “I want to be the Netflix of fashion”, which could lead you down the path of high-end evening gown rental services like Rent the Runway.  Consider companies like Starbucks, Twitter, Domino’s, NIKE, Home Depot, or any other innovative company you can think of.

Your mindsets naturally constrain your ability to consider alternatives and possibilities that go beyond the boundaries of your thinking. Your limiting assumptions can be about personal skills, team knowledge and abilities, organizational capabilities, market needs, technology, financial limitations, partnership possibilities, competition, or just about anything else. The goal is to recognize you hold assumptions and then act to surface them.

As the writer John Seely Brown once said, the harder you fight to hold on to specific assumptions, the more likely there’s gold in letting go of them.

Image credit: Pexels

This article was originally published on Inc.com and has been syndicated for this blog.

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Impact of Cultural Differences on Innovation

Innovation and Impact of Cultural Differences

GUEST POST from Jesse Nieminen

The effects of cultural differences for innovation are an interesting and extremely multifaceted topic.

For most of us, it probably goes without saying that cross-cultural and multicultural capabilities are crucial in today’s globalized and hyperconnected world, and innovation is no exception. These capabilities are especially important if you’re working on it in a large international organization, as many of our customers are.

Such an organization must obviously think about how to adapt new innovative products and services to the cultures and unique characteristics of different markets and regions. But, in addition to that, they also need to manage the cultural differences within their organization while trying to innovate. Given that we have customers all over the world, it’s a theme we often get asked about.

And, of course, there’s also the age-old debate about the cultures of certain regions or countries being better suited to innovation to begin with.

So, in this today’s article, we’ll dive deeper on this nuanced topic and each of those three themes around cultural differences in innovation. We’ll also end by providing you with practical advice on how to look at and take these into account in your innovation work.

How can cultural differences be observed?

However, before we dive deeper, let’s first take a step back and consider the question of how to observe cultural differences in the first place.

I’m sure we all agree that there are significant cultural and behavioral differences between people coming from different backgrounds, be it based on geographical, ethnic, religious, or just the past corporate cultures people have been a part of.

As these differences are often hard to pin down, people usually have an innate urge to try to group people into specific buckets to make sense of those differences. There are significant challenges in doing that as it can lead to putting people into predefined boxes and reinforcing stereotypes, and then treating people based on those stereotypes instead of the individuals they really are. That is why these kinds of approaches shouldn’t be considered universal truths or used as recipes for making decisions even from a purely pragmatic point-of-view, let alone from an ethical one.

Still, with that major caveat, there are also benefits in using such frameworks since they can help us make sense of the world in a more structured way. They can help everyone get a better understanding of the big picture and can serve as a starting point for creating a shared understanding, as well as debating the practical implications of cultural differences.

There are many such methods available, but the general approach is always the same: to break a culture down into several behavioral and/or value-based dimensions ranging from one extreme to another, and then rating each culture on each of these dimensions to form an overview of their respective cultures.

The most popular and widely researched of these are probably the GLOBE project, and the Hofstede cultural dimensions model, but there are also other popular ones like the Culture Map. Each of these frameworks uses the above described approach, and most of the research on them is primarily focused on the differences between individual nations. Having said that, the same approaches have also been applied to other levels, such as gender, organizational, etc. often just with slightly different dimensions.

Next, we’ll briefly explain the Hofstede cultural dimensions model because it’s one of the earliest, and by far the most popular model in the field. If you’re already familiar with the model, you can skip the next paragraph and jump right into the takeaways.

Hofstede’s Cultural Dimensions

Geert Hofstede worked at IBM back in the 60’s when it was one of the first true global, multinational corporations. As part of his work on improving cross-cultural communication, he ran the same survey on values for more than 100,000 employees from different countries and analyzed the differences, which then led to the creation of his model some years later.

Initially the model consisted of four dimensions, but upon additional research, has since been expanded to six. I’ll briefly explain each of these next, and then share a few examples to illustrate how that works.

Power Distance Index (PDI) determines how equally power is distributed and how hierarchical a society is. High scores indicate a structured and hierarchical society, whereas low values indicate a more distributed power structure and willingness to question authority.

Individualism vs. Collectivism (IDV) looks at how heavily individuals are integrated into groups. This is mostly self-explanatory, but it’s worthy pointing out that collectivist cultures are highly loyal to the close-knit groups they belong to.

Uncertainty Avoidance (UAI) determines how much ambiguity and uncertainty a society is comfortable with. High scores indicate that a society values clear, often strict, rules and guidelines and believes in there being a “singular truth”. Low scores mean that a society is more willing to explore new ideas and divergent thoughts and is less structured overall.

Masculinity vs. Femininity (MAS) is of a dimension that’s subject to some controversy, but here refers to values associated with traditional gender roles. A masculine society values achievement, assertiveness, and material rewards for success, whereas a more feminine one values cooperation, modesty, care, and quality of life.

Long-term orientation vs. Short-term orientation (LTO) is pretty self-evident. Long-term oriented societies tend to think more about the future and view adaptation and pragmatic problem-solving as important, whereas more short-term oriented one tends to value traditions and the current state and be less willing to change.

Indulgence vs. Restraint (IND) in turn refers to how much a society indulges and encourages freedom for individuals to “just have fun and enjoy life”. More restrained societies tend to have stricter social norms regarding such behavior as they see these indulgences as counter-beneficial for bigger, longer-term ambitions.

There’s been some research on how these tendencies affect innovation, and as you can probably guess, some tend to be more favorable for high innovation performance than others. Which brings us to the big question: are some cultures intrinsically better at innovation than others?

Are some cultures better than others at innovation?

Well, in short, the answer is yes. At least to some extent. As mentioned, there’s research that shows a relatively strong correlation between certain cultural characteristics and innovation performance.

However, here it’s worth pointing out that almost all of the research done on the topic would seem to focus on country level data as that is widely and freely available thanks to studies like the Global Innovation Index (GII).

While certainly useful, we should take these findings with a grain of salt due to a number of factors, such as the studies again being high-level generalizations based on correlations, and the indices like GII being predominantly focused on inputs for innovation such as education and R&D spending. Even the output focused parts tend to be a bit biased towards activity metrics, such as number research papers and patents, instead of the real value and economic impact of innovation.

What’s more, I think it’s important to point out that most natural cultures evolve much slower than the GII rankings change, so it should be quite evident that there are also many other factors than culture that affect these scores.

But with that out of the way, let’s now look at the actual findings.

Characteristics of top innovation cultures

Based on the available studies, there would seem to be a pretty good consensus on the ideal innovation cultures having the following characteristics on the Hofstede model, in rough order of importance:

  • Low power-distance
  • High levels of long-term orientation and pragmatism
  • High levels of individualism
  • High levels of indulgence
  • Low levels of uncertainty avoidance
  • Lower levels of masculinity

These findings are obviously mostly in line with what most of us think of as a pro-innovation culture, so there aren’t really that many surprises here.

If people can question authority, are comfortable with ambiguous and uncertain environments, and can think about the long-term instead of just the next quarterly results, innovation is a lot more likely to happen.

While there’s more to innovation performance than culture, certain characteristics are likely to lead to a culture being better at innovation.

In most studies, the level of masculinity seemed to make the least amount of difference of any of the variables for innovation performance. Some studies found no correlation, but some did find a preference for a feminine, more collaborative culture instead of the more competitive and assertive, masculine one.

However, in my opinion, the most interesting findings are that high levels of individualism and indulgence are favorable for innovation, when intuitively we might think that a culture that is more collaborative and favors restraint and delayed gratification would be preferable.

This can be explained with the way that the Hofstede dimensions are constructed.

A more collaborative culture is one where certain in-groups, typically your own family, come first, and where loyalty and obedience are absolute values. So, collaboration according to the Hofstede model isn’t so much for the “greater good”, but more about the benefit of that specific “inner circle” ahead of your own interests. More individualist societies, on the other hand, tend to be more comfortable disagreeing, exploring, and “letting the best ideas win”, which is what likely led to these cultures over-performing.

A similar explanation also applies for the preference for indulgence. According to the authors of the study linked above, people in indulgent cultures have a greater drive for improving things and making life more enjoyable, and are generally more optimistic, which they viewed as the primary factors driving innovation here, perhaps alongside a general willingness to just try new things.

So, in that context, I do think the findings make sense, but I think it’s also a good example of some of the challenges associated with more nuanced sides of these cultural frameworks.

Takeaways from country level innovation performance

Looking at the GII study, and the mapping of the top countries from that to the Hofstede model, there are a couple of points worth noting out.

Viima Hofsted Insights GII study of cultural dimensions

First, the top countries in the GII are pretty much what most people would probably expect. The top 15 consists primarily of the US, the Nordics, as well as some Western European and East Asian countries.

However, the interesting part is that when we map these out to the Hofstede model, it’s immediately obvious that even the top performing countries are essentially all over the spectrum. Once we look a bit closer, it’s also evident that no individual country has the perfect innovation culture, as defined above.

To elaborate further, I think there are a few key takeaways from all of this:

  1. There’s more than just one way to be a great innovator
  2. While there are a few distinct types of cultures that generally do better, every culture has its own strengths and weaknesses when it comes to innovation
  3. You can improve your odds of succeeding at innovation by quite a bit if you recognize the biases of your culture that are likely holding you back

Top performing organizations should thus take these biases and cultural differences into account, and purposefully shape an organizational culture that is distinct from the average of any individual country and instead designed to drive more innovation. Here, diversity can be a real asset, but that’s another massive topic on its own.

Every culture has its own strengths and weaknesses when it comes to innovation. You can improve your odds of succeeding at it by recognising the biases that are holding yours back.

Having said that, there’s quite a bit more to creating this kind of an innovation culture than just what the Hofstede model captures, and we’ve written about that in detail in this earlier article.

However, one aspect that I’d like to highlight here is that innovation is requires a strong combination of both exploration and execution, so your culture should have a good mix of capabilities in both extremes.

If you’d like to start shaping your culture in practice, you can download our free Innovation Culture Toolkit for actionable tools that can help you do just that.

With that said, let’s now move on to the more practical implications of cultural differences for innovation work.

Multi and cross-cultural innovation capabilities

Let’s start from the first and most obvious challenge innovators in a globalized world face: how can their products and services, as well as sales and marketing efforts be relevant when doing international business, especially in different, highly culturally diverse regions?

In certain situations, and for certain products, it can be completely fine to just do minor localizations like translations, and primarily use the same channels, models, and messaging across the world. This will keep things much simpler and there are situations where these benefits can outweigh the costs for both your customers and your business. For example, this is the route we’ve so far decided to take with Viima.

Having said that, if you don’t adapt your offering and operations to different cultural and market preferences, you often can’t reach your full potential. In some situations, it might even take a completely different approach to reach the same goal in different cultures.

P&G is these days often cited as an example of a multinational company that has been able to successfully grow in emerging markets, but one of the lessons they learned the hard way was that just operating with the same products and models as they did back home wouldn’t work.

For example, according to ex-CEO Lafley, when P&G decided to focus on the baby-care market in Asia, the initial approach was to just cut away material from the diapers sold in Western markets. The problem was that to get to a cost-level that was acceptable, they had to cut out so much that the products no longer worked as intended. Once they went back to the drawing board and created an entirely new product with a completely different design focused primarily on costs instead of the latest technology, they succeeded in creating an attractive product and eventually became the market leader in China.

Pampers Cultural Tailoring

However, in most cases, either extreme isn’t the way to go. You need to look for a solution that allows you to build on your strengths, but still cater to the different cultural preferences of those whom you choose to serve – and usually that isn’t everyone.

Of course, for most of us who are innovators, that isn’t really that different from what we do anyway: we know that whatever great ideas we have, many will never survive first contact with the real world.

Cultural differences and local preferences of different markets are just another variable that we’ll need to take into account in our innovation work. Still, if you’re aiming for international business, it is a topic that you’d be wise to consider during your development process as it can save you a lot of trouble down the road.

Now, if you already have team members that are intimately familiar with these different cultures, it’s just common sense that the whole process is likely to be quite a bit smoother. And the evidence backs it up: this is one of the reasons for diversity being an asset for innovation.

But with that, let’s finally cover the practical considerations of what all of the above means for our organization before we wrap up.

Managing cultural differences within the organization

This is of course another massive topic, so we’ll keep things focused and will seek to provide you with the three key principles we’ve generally found to work well for getting great innovation outcomes in an international, multicultural organization in our work with such organizations.

While many of these are quite practical, depending on your role, you might not be able to put all of them into practice right away. Still, I’d recommend thinking about ways you can apply the same core ideas within the scope of your innovation work.

Cultural Differences for Innovation

Communicate about cultural biases and expectations openly

To illustrate this, I’ll share a story from No Rules Rules, which is a great book that I’d warmly recommend if you’ve made it this far into the post.

Before Netflix expanded internationally, it had a somewhat stereotypical US style task-oriented culture. It was quite common for employees to have lunch while working on their computers. However, as they expanded to Brazil, it quickly became obvious that this was a bit of a problem as, in general, Brazilians really value the relationships built over shared meals. As a result, early employees didn’t exactly feel welcome.

After some time, this came up in discussions, and while it was a trivial thing to fix, it still made a huge impact on morale. And not only did that help them adapt to local habits, but the changes also enriched the culture of the organization globally.

Netflix is known for its company culture

So, the takeaway here is that it’s important to pay attention to cultural differences and discuss them openly. Usually, the issues are easy enough to fix, but when they aren’t discussed, you easily miss them, and that’s what leads to many challenges down the road. The reality is that most people won’t be familiar with everyone else’s culture by default and expecting that to be the case just isn’t realistic.

Have core values and some norms, be flexible on the rest

Each organization’s culture is a result of its background. A sum of its parts, if you will. Be it the nationality of the company, past strategic and hiring decisions, and even simple practices and ways of working that have stuck around for one reason or another.

A few of these factors are core for the identity and competitiveness of the organization, and it’s these core values that you should hold on to. However, most of these factors are simple habits that are inconsequential in the grand scheme of things.

Making the difference between the two is key.

The core values and norms are something you simply need to succeed as an organization, and those you simply can’t compromise on. New employees, whatever their background or experience, do need to adhere to these few essentials. And for that to happen, you need to train them on these values and principles and tell why that is so important for your organization.

You should be adamant about upholding your core values, but be flexible and willing to give up or change the more inconsequential parts of your culture so that it can evolve and improve

On the other hand, the rest of inconsequential norms and habits you should be willing to give up or change when needed so that everyone can feel welcome and be the best version of themselves. Everybody doesn’t have to be a carbon copy of one another.

But there’s more to it than just that. The right changes can, in fact, make your culture better. This is essentially what “hire for culture add, not culture fit” means in practice.

Let’s again use the Netflix lunch example. Was it crucial for the company to have employees to eat at their desks? Of course not. It was just an inconsequential habit. However, it was vital to have the new Brazilian employees feel welcome, not just because it’s the right thing to do, but also because it improved the company’s performance. Plus, introducing this conscious habit globally helped have a positive impact elsewhere too!

Shared Lunch Brazil

The same can be applied even within the scope of your innovation work. For example, if you’re working on a new medical device, quality and safety are much more important than absolute speed to market. On the other hand, for a consumer web app, it’s probably the other way around. The exact values mentioned here aren’t important, it’s that they should support your strategy and innovation capabilities.

Figure out what the true core values and norms are for your innovation efforts, and make sure to reinforce these – and then be flexible on the rest.

Push decision-making down whenever possible

We’re a strong advocate for decentralized innovation. I won’t recap the whole topic here, but in a nutshell, it’s people who are closest to the market and the real work that often come up with the best ideas. Also, a decentralized approach allows you to dramatically scale your innovation work, which is key for long-term results.

While we’d argue that this is usually the preferable approach, it’s even more important when you’re operating in a multicultural and international environment, as we pointed out earlier.

Not only is this likely to lead to better decisions, but it’s guaranteed to improve the accountability and motivation of the employees making those decisions, which will lead to better results.

This is a key characteristics of the Netflix culture, and CEO Hastings prides himself in doing as few decisions as possible. And, at large, it’s seemed to work really well for them.

However, a market where they are struggling is India. And, at least on the surface, it looks like the problem has been that they’ve tried to adapt the same success formula to India as most other markets: using local top talent to produce new hit TV shows. The problem is that apparently Indians value sports and movies much more than they do TV shows, which has led to competitors focused on those areas dominating the market and a big commercial disappointment for Netflix. From the outside, it’s hard to say if they didn’t really live up to their values here, or if the mistake happened regardless of that. Still, I’m sure there were people on the ground in India that knew of these cultural preferences beforehand.

India Cricket

In practical terms, there are naturally some opportunities and capabilities that make sense to work on centrally, but in an international organization there are also plenty that would be best tackled by empowering people further down the organization to make decisions that best drive the key interests of the organization.

For example, some of our customers have launched big international innovation campaigns or other initiatives and struggled. They might find it difficult to engage people in the field because the centralized effort just doesn’t feel relevant for many of these people, or they might not be able to implement enough good ideas with that same centralized approach.

While there are others that have succeeded in similar centralized efforts, our most successful and advanced customers have nearly without exception evolved the way they work to really embrace innovation at the scale of the organization at large.

…and make sure innovators have the support they need

However, for that decentralized approach to work, you need to guide and support the people innovating across the organization. This is of course not specific to just an environment where there are cultural differences, but for innovation in general.

You likely have plenty of smart and capable people working for you who’d be more than capable of driving innovation, but if they don’t have the right resources, tools, and mindset, they might struggle.

So, in practice, you should:

  • share strategic priorities, and make sure people continue to work towards those
  • provide tools and resources that help people with the innovation process
  • communicate and oversee the above-mentioned core cultural values and norms of the organization
  • help people with challenges in being heard, understood, or taken seriously by others
  • help facilitate discussions and share innovation best practices between different parts of the organization

Often, the most convenient way to accomplish the above goals is to make these efforts a priority of your centralized innovation team, instead of having that small team try to drive innovation themselves.

The right approach and specific methods, tools, and frameworks obviously depend on the situation, but the point is that with the right support, you’ll find that people will often surprise you with the innovations that they’re able to create. The key to success with this model is to proactively invest in improving capabilities and supporting innovators across the organization.

Anyway, with this kind of an approach, you can move from just trying to manage cultural differences, to embracing and using them to drive value for your organization.

Conclusion

The topic of cultural differences is such a complex and nuanced topic that  we’ve barely scratched the surface on here, even though this has been a pretty long article.

But to summarize, if ignored, cultural differences can become a big challenge for innovators. Yet, if embraced and properly managed, it can turn out to be a real advantage for you.

The first step is to understand that these differences exist in the first place, and that teams and people from different backgrounds are likely to have certain strengths, but also certain weaknesses, when it comes to innovation.

Then, reflect on what the ideal culture for innovation looks like in your specific business, and discuss these differences openly with your team.

And finally, try to approach the whole process systematically, with the help of tools like our Innovation Culture Scorecard, one by one addressing challenges that are holding your team back from reaching its true innovation potential.

As mentioned, when embraced and properly managed, cultural differences can turn out to be a real competitive advantage for an innovator.

This article was originally published in Viima’s blog.

Image credits: Viima, Pixabay, Unsplash, Pexels

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A Guide to Organizing Innovation

A Guide to Organizing Innovation

GUEST POST from Jesse Nieminen

I recently read a couple of excellent articles by Nick Skillicorn, and Prof. Rita McGrath where both discuss the challenges and intricacies involved in structuring and governing innovation within a large organization.

This is a classic topic that every corporate innovator has without a doubt come across, and it’s also one where “the right approach” is often quite elusive.

Inspired by those articles, we’ll present the most common archetypes and then dig a little deeper on the topic and share our thoughts and experiences to help you figure out how innovation should be structured within your organization.

Why organizing innovation is challenging

Before we dive into the different models for governing and organizing innovation, it’s important to understand why this is such a challenging topic to begin with.

That’s of course quite a lengthy and nuanced topic, but in short, there is no such thing as a perfect organizational structure or governance model. The bottom line is that a large organization is simply such a complex entity that structuring everything perfectly so that there aren’t any kind of bottlenecks, misaligned incentives, or any duplication of work just isn’t very realistic. If you’ve ever worked in large organization, you’ve certainly come across some of these challenges.

Now, most of these challenges are likely to be worse with innovation than with “business as usual” as, by definition, innovation means introducing changes. And most organizations simply aren’t designed for constant change.

What’s more, businesses are naturally very different from one another. A structure that works for a single product software company probably isn’t ideal for a CPG manufacturer or a house of brands because not only are their industries different, so are the innovations they are going after. So, what works well for some organization probably won’t be ideal for you.

This means that benchmarking and then applying “best practices” likely won’t work too well. Unfortunately, there just isn’t a single correct way to organize innovation.

Exploring the organizational archetypes for innovation

Having said that, there are a handful of common approaches, which we like to call archetypes, that most organizations use as the foundation for their efforts to organize and govern innovation.

Both McGrath and Skillicorn have done an excellent job in presenting many of these approaches, so a lot of credit for the following descriptions goes to them and I’d warmly recommend you read their takes too. Regardless, we’ve summarized their main points and combined them with our own experiences to create the following archetypes.

We’ll next explain each of these briefly, along with a quick summary of the key strengths and weaknesses for each.

External Innovation Organizational Model

No in-house innovation

The first and simplest way to organize innovation is to not do it, or to completely outsource it. Perhaps the most common method here is to simply keep tabs on promising startups and then acquire them, or to have tight collaboration with universities and other research institutions.

While this obviously keeps things simple organization-wise and minimizes fixed costs, it also means that you no longer have control over your own destiny, and are instead reliant on third parties, which puts you in a very vulnerable position long term. Furthermore, in the last decade, we’ve seen a huge inflow of capital to fund startups, which means that valuations for promising startups have skyrocketed and acquiring them on the cheap is simply no longer a very feasible strategy.

Suffice to say, if you want to build an organization that thrives in the long run, I wouldn’t recommend this approach.

Pros

  • Low fixed costs
  • Structurally simple


Cons

  • Lack of strategic control and ability to build the future of the organization
  • Lack of differentiation
  • Reliance on third parties for both execution and especially exploration
  • Acquisition of promising innovations has become expensive

Centralized Innovation Organizational Model

Centralized

Perhaps the most common way large organizations set up innovation is by creating a centralized department that serves the innovation needs of the entire organization including each business unit and support functions, such as IT or HR. This can be a subdivision within R&D, but these days it’s typically a separate cross-departmental unit serving the innovation needs of business units.

Either way, such a unit is quick and easy to set up, and the approach has some other obvious advantages too, such as innovation expertise being built and managed centrally, which speeds up learning, as well as management and reporting being easy to organize.

It’s these advantages that make centralization the obvious choice for many who are just starting out with innovation. This is also an especially common approach for large industrial companies that typically have a strong R&D tradition.

If all of the innovation has to go through a single team, that team will inevitably become a bottleneck for innovation, no matter how skilled or large it is.

However, in the long run, this approach is also one that is likely to significantly limit your innovation potential. The reason is simple: if all of the innovation has to go through a single team, that team will inevitably become a bottleneck for innovation. No matter how large or skilled the team, they’ll never have enough resources. What’s more, this will also disincentivize everyone else in the organization from innovating and that prevents you from creating a true culture of innovation.

Pros

  • Quick, easy, and cheap to set up
  • Dedicated resources for working on innovation
  • Easy to govern, manage, and report on the overall innovation portfolio
  • Centralization can speed up learning


Cons

  • Poor scalability as centralized team will inevitably become a bottleneck for innovation
  • Likely to be pulled into too many projects, which leads to poor execution
  • High risk of degenerating into a support function serving business unit requests instead of strategically building the future of the organization
  • Likely to disincentivize others in the organization from innovating
  • Conflicting interests between business units can make prioritization difficult
  • Typically lack authority to make important, hard decisions

Dedicated Innovation Organizational Model

Dedicated

Popularized by Clayton Christensen as a solution to the Innovators’s Dilemma, dedicated business units for innovation have become increasingly popular in large organizations that are looking for the next stage of their growth. Sometimes these units have proper P&L responsibility, and they might even report directly to the CEO or others in senior management, but at times they can also be innovation labs responsible primarily for testing and piloting new ideas before they are to be integrated into the core business.

Regardless of the particularities, these approaches have some specific strengths, but also clear weaknesses. The good thing is that because the unit is independent, it can usually avoid being held back by the restrictions of the business as usual and can build their talent and approaches from scratch.

If innovation is the job of a select few, it will be incredibly hard to build a pro-innovation culture.

The downside is that they also don’t necessarily play to the strengths that the organization has already built. Without strong and clear leadership, these kinds of innovation efforts are likely to have an equally poor success rate as your average startup – but without the asymmetric upside.

The reason is simple: if you already have hundreds of millions or billions in revenue, most new businesses just don’t move the needle enough – unless they can quickly grow to a massive size or be combined with the strengths and competitive advantages of the core business.

And just like with the centralized model, this model again limits innovation to one part of the organization. As before, that will likely prevent you from creating a true culture of innovation, and thus lead to the unit becoming a bottleneck down the road.

Pros

  • Freedom to operate independently from processes of existing business units, which is essential for trying new things and creating disruptive innovations
  • Ability to hire and organize specifically for innovation
  • If led well, ability to focus on the long-term instead of short-term performance
  • High profile innovation unit can also be used for marketing and employer branding purposes


Cons

  • Conflicts of interest and lack of cooperation between core business and innovation unit likely to lead to politics, tension, and other challenges in integrating innovations into core business
  • Independence and lack of communication between business units might hurt strategic alignment and prevent the innovation unit from benefiting from the existing strengths of the organization
  • Can easily degenerate into a cost center performing innovation theaterwithout a clear strategic focus, strong leadership, and evidence-based processes
  • Likely to disincentivize innovation in other parts of the organization and thus prevent the creation of an innovation culture
  • High initial investment with lots of uncertainty can make the business case for investing in innovation look bad

Embedded Innovation Organizational Model

Embedded

Many organizations have relatively independent business units or product and brand teams, and for them it can often make sense for innovation to be embedded within these units.

Traditional examples of such an approach are companies like P&G and other CPG companies with strong brands. These companies are working hard to keep up to date with evolving trends and consumer needs to innovate and create new products for the consumer. However, the same can also be true for many other kinds of businesses, such as software companies with multiple products.

Depending on the industry and organization, these units might have varying levels of control over their innovations once they are on the market. For example, in CPG companies manufacturing, logistics and many other functions would likely be managed by core business operations instead of this unit.

Pros

  • Better able to focus innovation on things that matter for each business, be they strategic projects or emerging customer needs
  • More control over innovation resources and ability to get talent that meets specific needs
  • Parallelization over different units can increase innovation throughput of the organization overall
  • Easier to align innovation with business needs and plans within the unit
  • The business case for investing in innovation is typically easy to make as you can start from low-hanging fruits that provide immediate value


Cons

  • Innovation likely to be biased towards more applied and incremental projects due to focus on immediate business needs
  • Some efforts may be duplicated between teams, especially if more long-term R&D work is being done
  • Can lead to a silo-effect, extra need to focus on facilitating knowledge transfer between units

Ambidextrous Innovation Organizational Model

Ambidextrous

Our fifth approach is usually referred to as the ambidextrous organization. We’ve  also seen it be referred to as the Hybrid model, and it’s quite a natural evolution from the previous archetypes as it seeks to combine the best of both worlds.

In a nutshell, the idea is that innovation should happen across the organization with existing business units focused on exploiting their current position through incremental innovation, and a separate dedicated unit being responsible for exploring and building the future of the organization through more radical or disruptive innovation.

In the ambidextrous model, existing units use incremental innovation to exploit the current position and new units are set up to explore and build future.

In practice, a new P&L responsible division will be setup for new non-core businesses, and the more incremental innovation will then be organised either as Embedded or Centralized.

If an organization does successfully implement such an approach, it can lead to exceptional long-term performance, but that’s of course easier said than done. For most organizations, this is likely to require a significant transformation, and it can be challenging to get everyone onboard, build the right processes, as well as to align goals and incentives the right way across the organization.

Pros

  • Easier to build a balanced innovation portfolio with both strong short and long-term performance
  • Enables building an innovation-oriented culture across the organization
  • Enough resources for key projects across the organization
  • Makes it easier to communicate the innovation strategy with clear roles and responsibilities for each part of the organization
  • Can customize governance models to meet the needs of different types of innovation in different parts of the organization


Cons

  • Expensive and difficult to build, as well as to maintain
  • Requires clear leadership and a commitment to a transformation from the top
  • Can demotivate innovation-oriented employees that are in the core business
  • Usually requires extensive changes to processes and the re-skilling of managers and employees across the organization
  • While easier than with most other models on paper, prioritization and division of responsibilities can still be challenging in practice

Decentralized Innovation Organization

Decentralized

Our final model is the decentralized approach. If you look at any of the best innovators in the world, be it Apple, Tesla, SpaceX, or Amazon, this is closest to the model they use. None of these organizations has a centralized or dedicated team responsible for all innovation in the organization.

Instead, the organization decentralizes the responsibility for innovation to happen in individual teams (which are typically cross-functional and relatively small) across the organization. Each team is focused on figuring out how they could help the organization better reach their strategic goals, and innovation is just one of the key tools in that process.

If a team (or an individual leader or employee) comes across a big idea that shows promise but would require significant additional investments, they’ll apply for additional resources from management via a quick and streamlined process. If approved, that typically leads to another team being set up to pursue that idea.

This approach is sometimes called the permissionless model due to the significant freedom each team possesses to make decisions affecting their own work. The obvious advantages are that they usually know the problems intimately and have the resources, incentive, and know-how to solve them, and have fewer dependencies to other parts of the organization. That leads to an extremely high pace of innovation and innovation throughput for the organization, which together create a tremendous competitive advantage.

Loosely Coupled vs Tightly Coupled Organization

Having said that, this too isn’t exactly an easy model to implement for most organizations. Typically, this would require a fundamentally different mindset, leadership philosophy, and a significantly higher talent density. For the average organization, that means a full-blown transformation where most fundamentals in the organization would need to change, which of course isn’t feasible for many.

Pros

  • Extremely high throughput and pace of innovation
  • Ability to adapt, re-organize and meet changing demands quickly
  • Strong focus on execution and value creation
  • Clear roles and responsibilities


Cons

  • Would require a fundamental transformation for most organizations
  • Requires strong communication and strategic clarity from management
  • Active management involvement required to remove barriers and to organize teams so that the portfolio remains balanced
  • Requires high talent density across the organization, which can be very challenging to achieve in practice
  • Continuously evolving and rapidly changing landscape might be too intensive for some employees
  • Some work often initially duplicated across teams, but can be managed by creating horizontal support teams

Choosing the right approach for your organization

As you can see, every approach has their benefits, but also their disadvantages.

In our experience, the Hybrid and especially Decentralized are the likeliest approaches to lead to sustained levels of high innovation performance in the 21stcentury but implementing either isn’t exactly a walk in the park for a large organization. If you have the luxury of meeting (or are close to meeting) the prerequisites, these are the models I’d personally go for.

However, for many, that just isn’t the reality. Even if you’re like most organizations and don’t quite have the talent, leadership, or other prerequisites needed for these approaches, I’d keep either the Hybrid or Decentralized approach as your eventual goal to build towards.

Move control and decision-making down in the organization to be able to move faster, make more informed decisions, respond to changes quicker, and to simply innovate more.

However, instead of a major overnight transformation, you should be prepared for a set of smaller, gradual steps that build your capabilities and culture towards that future while solving the current problems with your processes and structures.

Centralization vs Innovation Maturity

While not ideal in theory, in practice the journey towards becoming a mature top innovator typically first leads towards centralization for most incumbent organizations. They need to build their innovation strategy, knowledge and capabilities before they can successfully decentralize and move control and decision-making down in the organization to be able to move faster, make more informed decisions, respond to changes quicker, and to simply innovate more.

With that background, if such an approach is used, it’s crucial that this centralized innovation function understands and embraces their temporary role so that they are willing to relinquish control and power over innovation to others. All too often we see these leaders clinging on to the team, budget and power they’ve built long after it would’ve been in the organizations’ best interest to re-organize.

Best practices for organizing innovation

As we’ve discussed, if you’re planning to make changes to the way you organize innovation, most decisions will depend on your context. Still, there are a few things that are good to keep in mind regardless of the approach you end up choosing. Here’s my top three:

The best innovators continuously evolve

The first, and perhaps the most important point to remember is that the best innovators continuously evolve and improve the way they work. They don’t just pick one organizational structure and go with that forever. Instead, they are constantly looking for ways to re-organize their efforts so that they work on whatever is likely to best help them reach their goals. This is of course one of the fundamental strengths of the Decentralized model but applies to other approaches too.

This is also in line with how the most successful organizations approach re-organizations in general. They don’t just wait until the old structure is burning, they act proactively to position themselves for the future they want to create.

Clear roles and decision-making structures

It’s pretty obvious, but if people don’t know who can make a decision on an idea that they may have, or even who’s responsibility it would fall under, odds are that not a lot of innovation will happen.

The reality is that there will always be some ambiguity and overlap, especially in fast moving environments, but clear roles and decision-making structures are regardless important for an organization that wants to innovate.

If projects or decisions seem to get stuck, or turf battles seem to consistently pop up in your organization, unclear roles and ambiguous decision-making are likely to be the main culprits.

Organize according to strategy and plan for the execution

Again, it might sound obvious, but especially with innovation, the differences can be dramatic. Organization is the link between your strategy and your execution, so make sure it isn’t detached from the realities of what it will take to reach your goals with innovation.

To use a bit of a simplified example, if your strategy is focused on creating new business from emerging disruptive technologies, then the Embedded model probably won’t cut it as your innovators will be kept busy by the priorities from the core business.

How to organize innovation

Plan for the execution, on the other hand means that each team should have the resources and the freedom needed to reach your goals. If, using our previous example, you allocate just a few engineers to the team and then hope that sales will magically turn those technologies into booming businesses, odds are very much against you.

In other words, try to allocate resources so that the team has everything they need to reach their goals. While this sounds super basic, we still see these mistakes frequently when innovation is a bit of an afterthought for management.

Conclusion

As is probably evident by now, no structure or approach to governing innovation is ever going to be perfect, at least for long. As your goals change or your business and industry keep evolving, you will need to change and evolve too.

Even though organizing innovation doesn’t seem to get the same kind of attention as innovation strategy or culture, it’s extremely important, nevertheless. Get it wrong, and it will be almost impossible for your organization to succeed at innovation. Get it right, and you’ll at the very least have a realistic shot at that.

Hopefully this article has provided you with more thoughts on the topic, and some views on what to do and not-to-do.

This article was originally published in Viima’s blog.

Image credits: Unsplash, Viima, Nick Skillicorn

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Managing Both the Present and the Future

Managing Both the Present and the Future

GUEST POST from Janet Sernack

In our last blog, we described the three characteristics that offer senior executives a “unique unfreezing opportunity” from the disruptive COVID-19 hiatus and the rate of exponential technological change. These involved developing a future-ready company that builds upon pandemic-related accomplishments and re-examines (or even reimagines) the organization’s identity, how it works, and how it grows. This means that every organization, regardless of its size and specialization, requires its leaders, and teams paradoxically, to be both competent and confident and be both human-centered and customer-centric, in effectively managing both the future and the present.

Simultaneously, we all need to ensure that they capture the best of what we’ve all learned to keep the digital momentum going and, at the same time, initiate the shift to quantum –  by exploring, discovering, identifying, and unleashing the possibilities and opportunities of a post-COVID-19 world. To maximize, what McKinsey & Co describes as a “turning point” for economies: where new patterns of consumer and business behavior have emerged at extraordinary speed and can be sustained over long periods of time because digitization has accelerated change faster than many believed previously possible.

Unlearn, relearn, reskill and upskill

Reinforcing that managing both the future and the present requires generating new ways of harnessing and maximizing people’s collective and connective intelligence by:

  • Investing in helping people unlearn, relearn, reskill and upskill to meet the needs of jobs transformed by technologies created by globally accelerated digitization.
  • Helping people create vital new references and landing points for a future that they may not have previously imagined, and by;
  • Supporting them in being comfortable with the discomfort this brings.

Focusing on developing an organizational culture that is more adaptive and innovative, where people operate as a connected, mentally tough, and emotionally agile workforce; and are enabled and empowered to dance at the edge of their comfort zones, co-create value, deliver a great customer experience and succeed in a transforming market.

Both Human and Customer-Centric

Through developing both human-centric and customer-centric relationships that:

  • Enable people to shift from human-centered doing to human-centered being through connecting compassionately, creatively, and courageously through reciprocity and collaboration. Acknowledging that consumers have shifted largely to digital channels and many people are at home “nesting” and at the same time “languishing” in their remote and virtual workplaces.
  • Empower people to become customer-centric by co-creating collective value that customers appreciate and cherish. Acknowledging that the virus has interrupted, accelerated, and even reversed longstanding and conventional consumer and business habits.
  • Engage people in co-creation and in taking collective action to ensure that the rebound is not uneven. Enabling people to reboot creatively by maximizing the opportunities arising from the acceleration in the adoption of digital, automation, and other technologies.

As well as using innovation to add value to the common good in ways that improve humanity, by focusing on people, profit and planet.

Seizing the opportunity – it’s paradoxical

Developing future fitness requires people to not only unlearn, and see the world with fresh eyes, it also involves being able to sense and perceive it through a paradox lens; which helps us shift our focus across polarities of thought, from binary and competitive to critical, conceptual, and complementary thinking.

An often-quoted example is that as humans, we need to both exhale and inhale, we need to both rest and be active, rather than just do one or the other, or simply just either exhale or inhale, either rest or be active.

This means that a paradox is formed by contradictory yet interrelated elements that consistently coexist, and as leaders, teams, and coaches, we need to master this to develop the capability of managing both the future and the present simultaneously.

Embracing paradox

Embracing paradox involves being able to consciously shift cognitively from perceiving a prescriptive “either/or” world, which makes things black and white, right and wrong, mandatory or voluntary.

Towards embracing both poles, or polarities, and finding a balance within the dis-equilibrium.

As leaders, teams, and coaches, to seek equilibrium, by balancing both an ability to maximize and minimize people by exerting both powers over them, and by sharing power with them, to unleash both possibility and necessity thinking.

Dancing with dis-equilibrium

Letting go of an “either/or” perspective creates the safe spaces that allow people to flow with “what is” and to then evoke and provoke our thinking to perceive “what could be” possible.

By leading through dancing with dis-equilibrium to co-create a state of equilibrium to be an effective, agile, and creative leader and team member in a disruptive VUCA world.

In ways that allow people to confront and flow with tension and conflict, scrutinize any inherent contradictions by evoking and provoking creative ways in which the competing and complementary demands can be met in managing both the future and the present simultaneously.

Being both human-centric and customer-centric

Developing future-fitness requires leaders, teams, and coaches to be both human-centric and customer-centric simultaneously – to co-create organizations that integrate the values of human-centered design as a framework to balance the needs of the organizations with the needs of its users, customers, and communities, and for the common good and future of humanity.

Being human-centered

Being human-centered is also defined as being “marked by humanistic values and devotion to human welfare” which means that to create more human-centered leaders, teams, and people – we need to know how to shift the paradigm both from human-centered doingand towards human-centered being by:

  • Helping people explore and embrace their own humanness.
  • Being willing, enabled, and empowered to develop reciprocal and collaborative relationships.
  • Connecting to ourselves and others openly through how we feel, express and tap into our own emotions and those of others we interact with.
  • Being altruistic in serving the common good in ways that potentially add value to the future of humanity.

Being customer-centric

Customer-centricity is a way of doing business that fosters a positive customer experience at every stage of the customer journey. It aims at building customer loyalty and satisfaction leading to referrals for more customers. Anytime a customer-centric business makes a decision, it deeply considers the effect the outcome will have on its customers and users.

To create more customer-centered leaders, teams, and people – we need to shift the paradigm from seeing business as both a source of revenue, wealth, and profit and towards customers being the reason and source of business success, or not, by:

  • Developing a customer-centric purpose, vision, and mission that every leader, team, and team member is aligned to, and has a line of sight to, and is able to contribute towards its achievement.
  • Anticipating customer and potential user needs.
  • Ensuring that there are a rigorous and regular customer and cultural assessment metrics and feedback mechanisms in place.
  • Ensuring that leadership and team capabilities to adapt and grow are aligned to achieve the purpose, vision, mission, and goals.
  • Enabling every leader and team member to connect with, and listen to customers, and then build products that meet customer needs, anticipates customer wants, and provide a level of service that keeps customers coming through the door and advocating for the brand or business.

Harnessing collective and connective intelligence

Reinforcing that managing both the future and the present requires generating new ways of harnessing and mobilizing people’s collective and connective intelligence in ways that ultimately co-create organizations that integrate the values of both innovation and human-centered design as a framework.

This helps balance the needs of the organizations with the needs of its users, customers, and communities, as well as enables leaders, teams, and organizations to collaborate towards contributing to the common good and to the future of humanity.  It will also help people co-create both vital new reference points and landing strips for a future that they may not have previously imagined, and support them in being comfortable with the discomfort this brings.

This is the next blog series of blogs, podcasts, and webinars on Developing a Human-Centric Future-Fitness organization.

Find out more about our work at ImagineNation™

Find out about The Coach for Innovators Certified Program, a collaborative, intimate, and deep personalized innovation coaching and learning program, supported by a global group of peers over 8-weeks, starting October 19, 2021. It is a blended learning program that will give you a deep understanding of the language, principles, and applications of a human-centered approach to innovation, within your unique context. Find out more.

Image credit: Pixabay

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