7 Ways to Fail at Innovation
“Innovation” is an over-used and little understood buzz-word right now. In fact, in research on 20 large UK companies’ annual accounts, the word is used a total of 237 times. However, few of the organisations that we speak to behind closed doors think they have cracked it, with inherited structural and cultural barriers being key blockers.
So who innovates really well? The answer to this question, almost unanimously, is entrepreneurs. Does this mean that large organisations should pack up and leave it to them? No. By thinking differently, both as entrepreneurs and intrapreneurs, we can change the way that we impose our will on the world and create new things.
Entrepreneurial Spark has helped over 3,000 entrepreneurs to develop and scale innovative businesses by accelerating their mindsets and behaviours. We have also worked with over 5,000 intrapreneurs to help them develop entrepreneurial mindsets and behaviours to apply to innovation within their organisation. We have learned a lot about what works and what doesn’t when it comes to practical innovation, and worked with several international companies on how they can adopt a more entrepreneurial approach.
In this work we see common themes in big organisations (both public and private) – the core barriers to seeding, growing and developing new ideas. We hope by sharing this we can raise awareness of the gaps, so that if you are working in an environment where this is missing you can change something.
Over the next week we are going to release one of our “Seven Deadly Sins of Innovation” each day. So here is the first:
Deadly Sin #1: Don’t have a strategy
This comes in at number 1 because it is the foundation of all the other errors. Many organisations will talk about wanting to innovate, but won’t outline how they want their staff to go about this or what outcomes they are looking for. Activity is not monitored, and performance not managed.
Adding “Innovative” to your values can be a start, if it is important to you and backed up with action. Staff at every level need to know what you want them to do.
Having an innovation strategy gives people license to get out of their chairs and do something about it, and the understanding that it is important to DO SOMETHING. It gives middle managers something to manage to, so they can reward behaviour that doesn’t always have a financial metric.
A strategy also helps to avoid indecision and analysis paralysis in leaders by giving them a framework to make the difficult calls and try new things. “What’s your innovation strategy?” is a very simple but telling question that we frequently ask our entrepreneurs. Can you answer it?
Deadly Sin #2: Don’t talk about it
If you want to fail at innovation make sure you never talk about it. Have it as part of your strategy by all means but don’t tell anyone! Developing an innovative culture needs frequent and consistent communication. That’s easy to say, but what should we talk about?
At the very least, people need to know the vision of the organisation and what part innovation plays in delivering it. It is also good to keep them engaged with regular updates on progress, successes and failures, and calls to action. What type of innovation are you looking for? Where do you see the opportunity? What challenges are you trying to overcome?
Great communication is not just top down. How well do your team communicate their innovative ideas upwards and laterally? How well can they articulate an idea to get buy in without a 40-slide powerpoint? We teach corporate staff to pitch like an entrepreneur, with credibility and passion, which can make a huge difference to the success rate of adopting new ideas. How good are your team’s elevator pitches?
Deadly Sin #3: Right First Time
This is a throwback to the way businesses were built after the industrial revolution. Mistakes are inefficient, so company culture is built around getting everything right first time and minimising mistakes. Failure is a bad word in many organisations. People and projects don’t have a license to fail, and in some cases it can be career ending. The reaction to a failure can be to hush it up and try and move on very quickly.
Let’s be clear; there are some circumstances where failure is not OK, particularly if you work in a regulated environment. The issue comes when this way of thinking seeps out into other areas of the business over time.
Failure is an intrinsic part of innovation. As Ken Robinson says “If you’re not prepared to be wrong, you’ll never come up with anything original.” How an entrepreneur reacts to failure is determined by their mindset, which is why we place so much focus there. We help entrepreneurs build their resilience by developing growth mindset (see Carol Dweck’s video here for an explanation of growth mindset).
If corporate staff adopt a growth mindset, then it takes the sting out of failure. It allows them to share their mistakes and gives them the resilience to try again, in the same way an entrepreneur does. Microsoft has invested into embedding growth mindset in their organisation, and seen a profound impact on innovation (read more here). Do you and your team celebrate and share failure as readily as you celebrate “right first time”?
Deadly Sin #4: Make it all about you
One of my favourite business quips is “don’t sell what you can make, make what you can sell”. Too many innovation journeys start with a person having what they think is a great idea, using their influence to get buy-in and then rolling it out.
The best innovation journeys don’t start with an idea, they start with pain. The perception of a pain point in a customer segment. That customer segment can be internal or external, but they should be the foundation of everything that you build from here onwards.
We use principles of customer discovery from Steve Blank who wrote the Startup Owner’s manual. My favourite quote of his: “No facts exist inside the building, only opinions”. You are not your customer. Your boss is not your customer. Only your customer can tell you what their world is like and what their challenges are, so you need to go and do in-depth research not on the idea that you have, but on the pain point that you think exists.
Run focus groups, do online research, trawl social media, stop people in the street, survey existing customers. Get out of the building and do everything in your power to make sure you grasp exactly what the pain point is and who has it. Do all this before you get anywhere near a solution.
If you are a leader in an organisation, asking people to come to you with problems they believe they can solve can have a radically different impact to asking people to come forward with ideas.
Tomorrow we will share one of the most common mindset barriers in both entrepreneurs and intrapreneurs. Ever thought you were innovating but struggling to get anything done? Come back tomorrow to find out the likely cause.
Deadly Sin #5: Perfectionism
Perfectionism won’t kill innovation entirely, but it will make sure that by the time you get anything done it will be irrelevant. It is a common mindset barrier for both entreprteneurs and intrapreneurs. Launching a new venture is risky – it can be expensive and the chances of failure are high (although a lot lower if you avoid Deadly Sin #4). So it’s best to make the product as perfect as possible before launch so that people are as likely as possible to want it, right?
Wrong. Firstly, even if you understand the customer’s problem you may not be building the right solution. So you could still spend all that time and money on development for it to flop. Secondly, it’s too slow. Both corporates and entrepreneurs risk being outmoded or disrupted if they take too long to bring new ideas to market.
To overcome perfectionism we enable intrapreneurs to use Lean Startup methods, outlined by Eric Ries in his book of the same name. This involves treating your idea like a science experiment, launching early with a minimum viable product and testing your assumptions as you go. This keeps your solution customer-led and means you can build at pace if you find a sweet spot.
Do you find new ideas take too long to develop? Or they don’t survive first contact with customers? Find yourself dithering for too long over which shade of green to use for the logo? The answer is to get lean.
Deadly Sin #6: Giving up too soon
Innovation is hard. It’s not as sexy and inspirational as the stories you read about, and a lot of it is frustration and failure. It is easy to get disheartened and give up on the strategy too soon. The first handful of customers don’t have the right pain point, or the first couple of versions of the new product don’t sell.
The very best organisations, with a strong pedigree of innovation, have a success rate of around 20%. That means AT LEAST 4 out of 5 of your new ideas will fail. We set expectations right at the outset with the organisations we work with, so there are no illusions of immediate, short-term glory.
This is why developing entrepreneurial mindset is so important – without the grit, the resilience, the embracing of failure, even the best strategy will sink as people lose heart.
Incidentally, the failure rate of innovation is also the reason why mindset-driven culture change is fundamental to success. Without a groundswell of purpose-driven change and innovation happening across the organisation (not just from the teams with “innovation” in their title) then how will you survive an 80% failure rate?
Deadly Sin #7: Assume people know how to do it
So having read the first six Deadly Sins you’re going to go back to your team and say “Hey, let’s innovate dudes!”, and everyone is going to set off at a blazing pace. You are going to be inundated with outstanding new ideas.
These statements are obviously false, but so often they reflect organisational behaviour.
People need motivation, empowerment and capability to drive change. Stereotypical entrepreneurs have these in spades, but in our experience they take work to develop even in that dynamic population.
In bigger organisations, motivation and empowerment come from leaders setting the strategy, values and culture. Innovative capability can be developed, and this is why we love working with corporate staff – there is entrepreneurial capability in everyone. People just need the development and inspiration to unlock it and direct it to the benefit of their company.
Assuming that people should know how to innovate, is like assuming they should just know how to drive. Innovation is a skill which needs support to develop, and with the right reinforcement it can become second nature.
So there you have it, the “Hall of Fame” – the Seven Deadly Sins of corporate innovation.
I would like to be clear on one thing around the word “failure” – it should be clear from the above that there is no stigma attached to this. This isn’t a list of “Ha-ha #Fails”. I use the word “fail” as it is so closely linked to innovation. Even if you have read this blog and resolved to go and change something, you will fail several times in the process of implementation.
Be humble, admit when you have got it wrong, learn and adapt. This is the only way people have ever made progress, and it is one of many vital mindset gaps that we as entrepreneurs, as intrapreneurs and as people need to close if we are going thrive over the next century.