I wonder who is withering on the innovation vine?

Dying on the grape vine 1This week I tuned into the Pipeline virtual conference for product development practitioners and gained an encouraging feeling that innovation is progressing along nicely. Packed all within a day there was plenty of material ‘fodder’ to feed off of and learn from.

A really good conference but what quickly followed was a strong dose of that withering on the innovation vine.

I read two consulting surveys around innovation

I’ve been suddenly pulled out of my virtual bubble back into the harsh realities of where innovation really is. Just simply how innovation is struggling and that lies far more at the top of our organizations than below, those below who are simply trying to ‘get on with the job’ but with at least one hand (or even two) tied behind their backs.

I have been reading two sets of observations, one from Fahrenheit 212, the other from Innosight and my mood began to change. I’m suddenly back in reality where we have this huge gap between those ‘working’ innovation and those at the top simply not engaging with innovation or still failing to understand it or even failing to connect the dots.

That growing gap at the top in what they need to do to make the connections both inside and outside the organization to manage the changing landscape. One that still suggests we have this consistent failure to align the strategic and innovation activities and provide a more balanced orientation in the mapping to different horizon thinking that is needed. It seems perspectives are totally out of whack.

The Fahrenheit 212 Post on their recent observations left me perplexed.

PerplexedFirstly Fahrenheit 212 asked 100 chief innovation officers a set of questions around their getting their innovation projects to market. They claim that forty-five percent of respondents said fewer than 10 percent of their projects make it to market.

Fahrenheit claim that was an “eye-opener for understanding the challenges that innovation practitioners have,” where Fahrenheit was suggesting 60 to 70 percent of incremental innovations should be the success rate.

As this view came through the Washington Post under “Corporate attempts at innovation are overwhelmingly dying on the vine” I was not able to view the actual results directly or more of the thinking that went into this and can’t find any further reference on this on their website besides a Facebook entry. I’d like too.

Why? – well surely there are significant differences between projects being managed or piloted at the CINO level than passing through the organization as supportive and incremental? Yet until I can understand the context of these ‘statements’ it is hard to judge this piece of information and its real importance, presently it lies as a “oh yeah”. As a starting point what is judged as an innovation project from the CINO’s perspective versus the everyday innovation occurring. Are these numbers so “eye opening”?

The whole position and value of the CINO is certainly up for grabs and in a ‘forming’ stage. One really good point made as a quote by Jon Crawford-Phillips, a partner at Fahrenheit 212 was this: “The primary value of the chief innovation officer is the connectivity between the company’s growth strategy and the decisions and focus of the senior leadership team and the translation of that into an innovation agenda”.

Crawford-Phillips was recommending corporations don’t align innovation with their financial interests and suggesting establishing this. He comments: “There’s a strategic way in which they allocate resources to core innovation, and there’s clear metrics around the performance of core innovation and a clear understanding of the financial impact of that innovation on the company’s balance sheet.”

I struggle with what I should be getting out of this ‘report’ as Fahrenheit 212’s suggestions because if they are determining clear metrics in core innovation performance and a clear understanding of the financial impact on the balance sheet then it is no surprise innovation practitioners have difficulties in getting initiatives and projects through organizations. Can projects that are in themselves innovative be measured on the same metrics as established known ones?

The comments reported from the survey leave more questions than answers and has this set of observations really helped ‘advance’ innovation? Maybe more will emerge. It seems to fit perhaps with their Money and Magic message.

On the other hand Innosight and their Strategic Readiness Survey really is the actual eye opener.

Eye opener 1Innosight offer an executive briefing on their “Strategic Readiness and Disruptive Change” and this survey throws up some serious worries for me.

The report prompts deeper thinking on how organizations are really having difficulties in transforming themselves with all the disruptive change going on around us all. A real eye opener.

Innosight’s summary provides a good snapshot of the issues:

“Disruptive change is accelerating, driven by the rapid emergence of new technologies, the blurring of lines between industries, and competition from both traditional and non-traditional players. As a result, corporate lifespans are shrinking”.

“How does the shifting landscape affect enterprise strategy and corporate innovation efforts? To see how organizations assess their ability to anticipate and respond to disruptive change, we (Innosight) recently surveyed more than 800 executives across 20 industries. The results shed new light onto the challenges and opportunities that leaders face in crafting strategies to steer their companies in both the near and long term”.

Top-level findings included:

  • Fully 85% of respondents say their organizations need to transform in response to disruptive change – yet only 49% say that feel very confident or confident that their organizations are prepared for transformation in 3 to 5 years. That number drops to 42% in a time frame of 5 to 10 years.
  • Large companies face an even greater “strategy confidence gap.” 83% of respondents from companies with over $1 billion in revenue agreed with the need to transform, and only 36% say they are confident to do so in a 5 to 10 year time frame.

The confidence gap suggests that organizations lack both the long-term orientation and the tools to plot long-term strategy. The survey bore this out:

  • Only 12% of organizations have a formal growth strategy with at least a 5+ year time horizon.
  • The remaining 88% either have no formal growth strategy or it is shorter term.

This short-term bias has implications for the ability of companies to develop disruptive or transformational innovations—the kind that open new markets and attract new customers—and which typically require a longer-term perspective.”

What a difference a well-structured survey and report can make.

I would recommend taking the time out to read this report. It signals much of what is so wrong at present in the sacrifice of the future, even the eventual existence of the organization in years to come.

This report seems to reflect a broader trend that this frightening “strategic confidence gap” is a huge one, where senior executives are seemingly being increasingly caught up in the short-term demands.

They seem to have scarce time to re-equip themselves, let alone their organization, for the changing landscape and are simply ‘kicking the bottle down the road’ and taking the pay packet that goes with short-term performance. Surely this has to change? Is it so bad?

This report is indicating it is really bad.

I liked the heading to each part of the executive briefing from Innosight as they do summarize the challenges that need to be faced and resolved.

  • The Confidence Gap: The Desire – But Not the Ability – to Transform
  • A struggle to Keep Pace : A Sense of Falling Behind the Market
  • Strategy Shortfall: Growth Plans Focus on Near-Term
  • Process Shortcomings Undermine Long-term Planning
  • Technology and Changing Consumer Preferences Expected to Be Most Disruptive
  • No Lack of Ideas, But Difficulty Getting Through Innovation’s “First Mile”

The last heading is a clear nod to the topic being explored in a new book. Recently Scott Anthony , Innosight’s managing partner, wrote a book “The First Mile: A Launch Manual for Getting Great Ideas into the Market”. That first mile—where an innovation moves from an idea on paper to the market—is often plagued by failure, in fact, less than one percent of ideas launched by big companies end up having real impact. The ideas aren’t the problem. It’s the process.

Gaining value from consultants insights if it enters the public domain

Thought leadership viewWe should get solid value out of research or insights from any consulting research if it is published. So two of our leading innovation consulting companies, Innosight and Fahrenheit 212 approach knowledge sharing in different ways.

Innosight provide a good depth in their report, although it is perhaps light on final takeaways and conclusions, whereas Fahrenheit 212 reported comments are just, well, simply ‘light’ and lacking the depth I would expect from them. At least their survey should link into their own report. This I simply can’t find.

I finally reflected on what makes good thought-leadership from consulting practices
Take a look at this from http://www.sourceforconsulting.com/whitespace/

What makes good thought leadership?

“The clients of consulting firms are inundated with information and analysis from every direction. Unquestionably, the vast majority are binned or deleted instantly”. So what are the factors likely to attract attention,  Sourceforconsulting.com suggest the following:

Differentiation – will the potential reader pick up and begin to read this piece of thought-leadership? (If it is actually available even!)
Appeal – does the writing style and presentation encourage the reader to keep on reading past the introduction and beyond? Where do they go from this?
Resilience – will the reader feel confident in what they are being told? Whether a client buys into the idea a consulting firm is trying to put across depends on the evidence.
Prompting action – ( I kept all the guidance within this section in, as it is relevant to the two reports I have focused upon) Will the reader do something because they have read this report? Good thought leadership takes the reader beyond the ‘that’s interesting’ stage – it gives them the tools and inspiration to identify issues in their own organization or to begin to address a pressing concern. We ask whether the next steps for the reader are clear. We also check that the material isn’t a poorly disguised sales pitch which would undermine its credibility and chances of prompting action.

A tale of two both working innovation consulting.

Two innovation consulting firms offering up their insights and I feel the one from Innosight is simply much further down the thought- leadership path, in its linkage of its practice and report around disruptive change. It ‘calls for’ and ‘prompts’ action.

Perhaps Fahrenheit 212’s report should have been rooted far more in what it does, that is identifying, developing, designing and implementing profitable new products and services and then framing this within their survey remarks, as this is the space they play in and by all accounts play well. It would have made better sense to me.

I think we all need to think about why innovation might be withering on the vine. We all need to ensure the contributions we make, into conferences, summarizing reports, writing blog posts or being engaged in innovation activities, as consultants or practitioners that we do not lose sight that innovation is still struggling to make headway in the ways it should, with the appropriate messages getting delivered effectively and sometimes we all often miss that ‘line of sight’ on that.

Any thoughts on the observations from the reports or what they contribute into our thinking around innovation?

Forming the unified view on innovation design

Although we are seeing a number of cases where innovation in its structures, functions and design are evolving, we still have not achieved the mainstream recognition of innovations importance within the boardroom. In many organizations it still lacks a clearly separated ‘voice.’ Its present voice tends to be fragmented within its parts represented by the separate functions providing their narrower view of innovation.

You still have marketing, research, financial, strategic development all offering their unique views of what and where innovation can contribute. This often ‘fragmented’ approach reduces the promising breakthrough effect of innovations potential contribution. By not having this comprehensive and cohesive viewpoint articulated at board level by a fully accountable person, the Chief Innovation Officer, innovation often stays locked up in one position or another. No one is stepping in and unlocking its full potential from a holistic viewpoint, totally responsible for innovation by structuring it, for adding real scale, giving it momentum and growing sustainability but more importantly driving it throughout the organization from the top board room perspective.

What this ‘combined’ voice can really bring too many present and future growth orientated discussions is real strategic alignment  significance; it can transform discussions and significantly influence directions the organization can take and where to allocate its resources. Yet innovation still struggles to be fully accepted as a fully functioning discipline and expertise needed in the boardroom to focus innovation on providing real sustaining growth, fully integrated and aligned across the whole organization for its value potential.

The exploring going on around innovation

Many organizations still are exploring how to approach innovation and you can see plenty of experimentations and I’d say interim ‘bridging’ solutions. We are making some progress within innovation for its function, location, financing and ownership, as these have shifted more towards the top of organizations, yet they still lack that final unifying catalyst, of appointing a chief innovation officer for many, and innovation as a strategic activity being pulled together in a unifying strategic innovation framework.

Some that have made this appointment are still working through the make-up of the function and how the ‘arm-wrestling’ works out between the existing groups making up their part of innovation and this new realignment can be hard work. Often, as the CEO lacks real innovation expertise to effectively arbitrate such an appointment, to design in the real accountability and appropriate weighting for managing such a critical component needed for growth, it does not have the executive strength built into the position to make it the pivotal role it should be. The role remains poorly understood in its focused value and contributions, and can be reduced to this in-fighting and trading, to make slower headway than it should.

Driving outcomes often required separate innovation functions.

Added to the lack of recognition of what ‘makes up a clear innovation function’ many organizations are still rather stuck in a silo thinking that innovation is only about developing products and services based on traditional functional lines. Innovation has evolved way beyond this product and service view only, or certainly should have done.

We need to explore making major shifts by thinking through different business models, working on a variety of collaborative platforms and ventures, having increased agility to explore, experiment and step far more out of the ‘classic’ core, into new adjacencies, or even investigate whole new ‘white spaces’ for business opportunities. Many are leaving this to others as they stay ‘locked into’ traditional viewpoints of what innovation contributes.

These significant changes on ‘how to innovate’ are creating organizational tensions that do need resolution as they are increasingly colliding against each other, like tectonic plates. These tensions are disrupting organizations and having a lot of internal friction that reduces performance, at this critical time when a unified approach to tackling external challenges would be better served by aligning the innovation view.

In some ways organizations are experimenting in different innovation designs but these still tend to be ring fenced, islands of experimentation that stay locked in their space and unable to be seen, strategically, for their (rapid) scaling opportunity due to this lack of a comprehensive, innovation view, from the top.

There are different designs being explored, often within the same organization. All serve a ‘given’ purpose but perhaps stay constrained by this lack of an overarching strategic understanding of innovation and its contribution to strategy and driving growth. We might be in real danger of dispersing innovation energy when we should be unifying it.

Diversity is made up of innovation experimentation.

We see today innovation centres, new-business development functions, separate emerging-business opportunities groups and selected incubators along with emerging-technologies business groups and even advanced-technologies or institutional collaborations. Each has a focused and valuable role to play but the cross-over values, the ability to drive cross collaboration and learning often lack that overarching coordination that only a dedicated top person can bring in bringing this together to serve the strategic purpose of the organization. Usually we also have the older established research and development centres, the marketing pilot plants and other more established and traditional avenues that product and service tend to work through.

I think we definitely duplicate resources, loose knowledge, constrain expertise and don’t get the potential innovation ‘horsepower’ out of the combining effect as and when needed. Can this change?  It certainly should to extract and unlock all of innovations true potential.

How we align innovation will decide many of our futures.

Alignment between the goals and objectives at the top of our organizations is still at serious ‘odds’ with what is being worked upon. We need a real strategic innovation framework. I’ve offered some thought on this in the past if you care to pick up on this as one starting point, in this article “The Overarching Proposition for the Executive Innovation Work Mat.

We are daily being faced by significant challenges in meeting our strategic objectives and where often innovation fails to bridge. Examples of this can be seen in the ongoing competition with short-term priorities from across the parts of the business as well as the difficulties of integrating different function’s objectives with those of the core needs.

Then there is still the poor business case or value propositions made often to corporate leaders, or that consistent dilemma of withdrawing funding from an idea that has not lived up to its promise and become one that drags and diverts away critical resources. All work against innovation delivering on its much-needed potential.

We are managing more cross-functional issues than in the past.

The more we engage with open innovation partners or begin to develop promising new business models then more we conflict with many established positions. This slows the real contributing value of innovation. These new challenges need a different type of boardroom representation, it needs a clear mandate for a Chief Innovation Officer, to bring the ‘disparate parts’ together and explore the broader potential that wider innovation can bring in all its potential forms.

A call for a new concerted effort for providing an overarching innovation design

Designing a new strategic innovation framework at the top of organizations helps close the many gaps we see today. We need to move from ‘disconnect’ to ‘reconnect’ and make innovation more centrally designed to meet today’s challenges, those that are cross-cutting, to allow innovation that greater freedom and scope to contribute into the growth organizations leaders are demanding.

To align innovation to the organizations strategic goals, we need to challenge many of the established practices and functions to allow innovation to fulfil its promise of being the true catalyst to growth.