Making Innovation a Systemic Capability
Winnovation: Rowan Gibson's April Column
By Rowan Gibson
When I go into a large company, one of the first questions I usually ask is this: Does your organization have a worldwide innovation infrastructure where anyone, anywhere can get access to the cash, the talent, and the management support they need to turn their ideas into market success stories? No prizes for guessing the answer.
Most companies claim they want to encourage creativity, risk taking, and rule breaking, but what you invariably find is that their management infrastructure and corporate culture actually inhibit these things. Talk to successful innovators in any large company, and you will probably hear a familiar story: “I succeeded despite the system.”
But if would-be innovators can only succeed in an organization despite the system—if they have to fight their way heroically through a minefield to push their ideas forward—then by definition, innovation is not a systemic capability in that organization, nor is it a core value that is deeply ingrained in the corporate culture.
For innovation to become a core competence and a tangible cultural value, there has to be a substantial degree of internal consistency between processes, metrics, reward structures, rhetoric, and top management behavior—and it is precisely this synchronicity that is lacking inside most companies.
Let’s take structure. In the majority of organizations, innovation is still forced to live in a disconnected “silo” like R&D, New Product Development, a Skunk Works, an incubator, or a New Ventures division, where it neither involves nor infects the rest of the organization. By their very nature, these enclaves lead a solitary existence, operating as an adjunct to the real work of the company, and in my experience they produce very few ideas that ever make a big impact on a company’s profits.
If we want to create the kind of structure that is required for opening up innovation broadly to the organization and to people outside it, we need to think about the social systems or institutional structures that have proven to be most conducive to innovation—universities, cities, industry clusters like Silicon Valley, or, most recently, the Web itself.
What creates the vibrancy and serendipity in these structures is the matrix of ever-changing human connection and conversation. However, in a large organization, over time, the conversational patterns tend to become etched in stone. There are fixed reporting lines, committee groups, task forces, and so forth. Companies tend to consign innovation to a small cadre of “experts” in specialized departments, and they end up having the same people talking to the same people, year after year, so they lose that conversational richness. In many ways, the organizational chart actually inhibits rather than increases the chances of making random, serendipitous connections.
To make innovation a pervasive and corporate-wide capability, the responsibility for innovation needs to be broadened beyond traditional structures and spread throughout a company’s businesses and functions. This is exactly what happened to quality in the 1970s and 1980s when it ceased to be the exclusive responsibility of a specific department and, instead, became distributed to every corner of the company. What is required is a similarly systemic infrastructure for innovation that starts at the corporate level and infiltrates every part of the organization chart. An infrastructure that makes managers accountable at all levels for driving, facilitating, and embedding the innovation process into every nook and cranny of the culture.
The best innovation infrastructures I have seen are linked directly to the CEO and include a global vice president of innovation, regional VPI’s, business unit innovation officers, innovation boards, innovation consultants and innovation mentors. These new, pro-innovation structures are designed to actively foster interaction across the organization and to distribute the responsibility and expertise for innovation throughout the company. They destroy the structural silos that usually separate people, ideas, and resources, and create a high level of cross-boundary connection, conversation, and collaboration.
In addition to building such an infrastructure to orchestrate and support innovation from everyone and everywhere, companies need to create the cultural conditions that serve as catalysts for breakthrough thinking. It’s not enough to simply list innovation as a core value in your corporate mission. When companies refer to innovation as a “value,” most of them are using the wrong term.
If an organization has not yet succeeded in making innovation a truly tangible core value for all its employees, the leadership team should be calling innovation an “objective” or a “commitment,” not a “value.” Innovation may well be something the leaders consider to be an imperative, and that they plan to put considerable effort into, but that does not mean that it has yet become a deep value for the company.
Talking about innovation—using it as a slogan in an advertisement or on a corporate letterhead—does not make it a value. Values are less about what you say and more about who you are. They define the beliefs an organization holds deep down about what is important and right, and they drive the way its people behave on a consistent basis. It is absolutely crucial to make this distinction.
For innovation to become a genuine value, it has to be deeply internalized and clearly tangible to an organization’s employees. It must be something, as Marcus Buckingham might put it, that helps to “change the daily rituals” and “introduce new heroes and language” throughout the organization. It becomes the net sum of a whole variety of messages and behaviors. In fact, in many ways, it is not really something a company can work on directly; it is something that comes from addressing a lot of other issues.
Innovation can only become a true value in a company through collective learning across all its levels, functions, and businesses—usually over considerable time. People need to not just hear that ideas are welcome “from everyone and everywhere,” or that rule breaking and risk taking are encouraged, or that ideas are allowed to fail without incurring punishment; they need to experience these things every day. That is when a corporate value becomes tangible enough to guide patterns of behavior across the entire organizational culture.
There are certain mechanisms a company can employ and institutionalize which can help to make innovation a tangible core value. They include things like consistent messaging from leaders (in both word and deed); a discretionary time allowance for reflection, ideation, and experimentation: broad-based innovation training; an open market for ideas; easy access to incremental seed funding; management structures for mentoring and support; and incentive and reward structures that encourage challenging the status quo, risk taking and entrepreneurship.
When these mechanisms become firmly ingrained in the corporate culture they provoke the right attitudes in people. Employees get the feeling that they are part of a vibrant, innovative company. They get hooked on the excitement and energy of innovation. They find it stimulating to work in a collaborative, open culture. They see that innovation is not just management rhetoric but a widely held and deeply embedded value. And they automatically begin to demand more innovation from themselves and their peers.
Thus, the demand for innovation ceases to be the sole province of the CEO or other top level executives. It starts to be driven from all levels of the organization. This is what it takes to make a corporate culture more conducive to innovation.
HR professionals can add a lot of value here. Their challenge should be to create a company culture where everyone in the company is responsible for innovation—whether as an innovator, mentor, manager, or a team member. That means that all HR systems—pay, spot awards, the long-term incentive plan, the balanced score card objectives—need to be hardwired into the company’s innovation strategy.
The bottom line: building a deep innovation capability requires a systemic approach. It requires your company to patiently assemble all of the above components, and to put the necessary drivers in place so that your corporate innovation system becomes sustainable.
© Rowan Gibson 2009
Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation. He is also one of the world's most in-demand business speakers. Rowan's books have been translated into over 20 languages. His new book Innovation to the Core (co-authored with Peter Skarzynski) was published in March 2008 by Harvard Business School Press. Rowan may be contacted at email@example.com