Over the years I’ve seen the approach to innovation vary in organisations. Where organisations are design-led an innovative approach is part of the cultural fabric or ethos of the organisation. This can be seen in organisations like Apple and Tesla. It can also be seen in many start-ups, where a founder, in pursuit of defining a vision sees obstacles as challenges to be solved and the perceived risk of large organisations as opportunities.
In the eighties and early nineties I worked in telecommunications companies that due to the nature of our move from an electro-mechanical to digital environment lived in a continuous river of change and innovation. New technologies, new methods of delivering services grew out of a rapidly changing environment. Mobile companies, dealing with issues of capacity in high-density markets like New York City, learned to adapt antenna technologies to innovate and create capacity to serve a rapidly growing network of users. Individuals and small teams innovated by creating portable mobile technology out of car phones, nylon cold storage beach bags and readily available materials to solve the needs of high-value customers.
Anyone working in the field realised that they were entering a new digital, portable, mobile generation, where demand outstripped the capacity of mobile and long distance networks, forcing companies to find new ways to meet demand. Innovation was driven by necessity. There was nothing artificial about it. Problems weren’t solved by Innovation teams. Those of us working in the field at the time understood the need to change, to experiment, to think creatively with rapidly evolving technologies, or we would disappear.
I later worked for a science and technology-based research and development company in the late nineties. This company, in existence since post-WWII, was an advanced research centre, developing ARPANET, advanced acoustic technologies, and early internet technologies. One of the members of our engineering team is credited with putting the “@“ symbol in a string of characters, creating the first email addressing system. A company populated by scientists and engineers, it epitomised the kind of company whose culture, people and ethos were driven by asking questions, addressing challenges and finding solutions. Innovation wasn’t a contrived or artificial construct – it was integrated into the fabric of the company. It was a company whose natural curiosity led to innovation.
Over the last twenty years I’ve worked in a number of digital start-ups. Often fragile, fledging organisations, understaffed and under financed, these companies learned to survive by running just that bit faster than those around them – and by being just that bit more agile – or risk real failure. They often had direct relationships with their Customers, were never afraid to make radical changes where they saw an opportunity to fine tune their offer to meet their Customer’s needs – or pivot when they discovered an unfulfilled need that might deviate from their original product or service. Failure and success were intertwined and innovating to create one and avoid the other are ingrained in the fabric and culture of the organisations.
Of course, not all of the start-ups survived. That is the nature of a risk-based environment. But they all had some things in common – limited time, teams who refused to fail, enough funding to get the opportunity to show the possibility of success, an enclosed eco-system that ensured they had control over changes they needed to make, mentoring and support from people around them who understood success – and a strong desire to interact with their Customers, always learning from them and incorporating those learnings back into their products and services. Their curiosity and desire to solve problems often led them to find innovative solutions to their problems – or not and risk failure.
Which brings me to large corporate innovation teams. In most cases these teams are artificial constructs – a response to a perceived feeling that their organisation should be ‘more innovative’. While they may be responding to growing pressures in their sector to find new ways to serve their Customers, in reality these large organisations often feel immune to these pressures in the beginning. The landscape around them isn’t changing fast enough, or they don’t feel the threats are viable enough to actually ‘feel’ the need to change in order to survive. They create innovation teams to respond to an environmental risk that in reality they don’t yet really believe exists – they are too big, their Customer base is too loyal, their cost base is too low and no matter what happens, they will survive.
These companies aren’t natural research and development companies either, with scientists and a natural curiosity to solve problems – where an ethos of innovation is embedded in the DNA of the company culture. Nor are they design-led organisations. If they were either of these things, they wouldn’t even consider the need for Innovation teams. Their focus is on selling enough of their products or services to cater to their shareholders, and often changing up the mix, or radical reinvention is considered too high a risk for them to undertake.
In many cases innovation team resource gets pulled into supporting everyday activities, and short-sighted proof of concept activities are mistaken for innovation. Often it only addresses a tactical issue in the moment, not a strategic issue in the future. Budgeting cycles, risk appetite, IT and other internal structures often put so much structure around innovation teams that they stifle any ability for these teams to even approach the possibility of achieving innovative outcomes within their organisations. In reality, it is not a team that needs to be set-up in isolation of day to day business activities – it is the entire organisation that needs to transform to being a design-led organisation, where innovation is built into the fabric and ethos of the way the company designs and delivers outcomes to – and with – its Customers.
And where innovation teams are treated as start-ups within large organisations… well, think about it. How can a team of 25 to 50 people pursue an innovation agenda for a diverse global organisation of 50,000 to 100,000 people, when the majority of the organisation is so incredibly silo’d, its direction so set, and risk-averse that everything ends up acting against an innovation team having the real possibility of achieving anything of any real substance? Start-ups control every aspect of their company, from sales and marketing to design and technology. People work hard for the possibility of succeeding – and the reward that success might bring. Everyone feels a substantial part of the organisation, and that their individual activities contribute significantly to the success – or failure – of everyone in the organisation.
People who work for start-ups take high risks. People who work for Corporate Innovation teams have quarterly reviews, end of year bonuses, a full range of benefits and relative security that their company will continue to exist in the market. The ethos and culture are not comparable, with Corporate Innovation teams often only able to mimic the attributes of start-ups without the fear of survival, roller-coaster of the venture capital process, excitement of the small successes and ability to see things through with Customers. After all, the reason they often exist is that the rest of the organisation isn’t design-led, and therefore even if they did innovate, their work would often get lost in the internal grinding of wheels of the organisation.
For me the jury is out on Corporate innovation. I think there are organisations who have great intentions when developing such efforts, but if the organisation itself isn’t ready to undergo the massive transformative change it would take to become a design-led organisation, how can innovation possibly occur? To me, it is only when the organisation is able to make that transition and become design-led in its thinking that innovation will occur – and even then, not in dedicated teams, but as a byproduct of everyone feeling empowered to create change, tackle challenges and pivot in their thinking.
Organisations that don’t understand this early enough to make that change, that wait too long to change, risk going the way of organisations like Blockbuster… does anyone remember them?