One key business topic which remains topical is that of innovation. Most CEO’s list innovation as one of their top priorities. However, innovation remains elusive. The vast majority of established firms feel there is a big gap between their efforts and their achievements.
So what do companies do? They can look to companies renowned for innovation such as Apple and Google, and try to learn from them. But that’s a flawed approach. Apple and Google have innovation ingrained their values. They have many years of success to build on and they are able to take some risks.
I think a more useful approach is start from the principles of innovation and look at high growth companies to understand how they are putting those principles into practice.
So what are these principles? Here are three that I think are really important:
Time Out. It’s a well-established principle that people need slack time to work through their ideas. As an example consider the software company, Red Gate. They first experimented with a “coding by the sea” initiative, where they got a bunch of volunteers to take over a beach house for a few days to see if they could make progress on a software product. This then expanded to “down tools week” which is a company-wide initiative, once a year, where everyone puts their normal routine work on hold and commits to doing something new, something a bit risky, or something that has been annoying them. There is also a “sweat the small stuff” day, once a quarter, for getting on top of the creeping bureaucracy and niggling problems that accumulate over time. These activities provide the necessary time out for employees, but with a reasonable degree of focus at the same time.
Loosely defined roles. One of the biggest obstacles to innovation is the notion of a job description — it is a guaranteed way of narrowing an employee’s focus around someone else’s view of what’s important, and of not making full use of their latent skill-set. Innovative companies avoid giving people job descriptions, or they find creative ways of encouraging them to join multiple projects. For example, Innocent asks all its employees to help deliver its vision, “to make natural, delicious food and drink that helps people live well and die old.” Over the last few years, its big new product lines — including a healthy Veg Pot and its This Water line — have both come from ideas conceived and developed by mid-level employees.
Tolerance of Failure. Successful innovation requires tolerance of failure. Very often so many management processes, the ones that support innovation, are designed to avoid failure and to ignore it when it does happen. Companies can try to breed tolerance for failure through using skills of leaders, but we also need to find ways of institutionalising this approach. For example the advertising agency Grey has a Heroic Failure award in similar vein.
Have you noticed a key theme that links these three principles? None of them involve idea-generation schemes. Rather, they are all about translating ideas into action. In my view, many companies get distracted by the ‘shiny new toy syndrome’ of new ideas, and they forget that the hard part is taking those ideas and putting them to work. That is where the real progress is to be made.
