Innovation in Practice

Innovation Muscle

The best Fortune 100 companies see innovation as an ongoing capability, not a one time event.  These companies work hard to build muscle around this capability so they can deploy it when they need it, where they need it, tackling their hardest problems.  Companies do this to keep up with the ever changing landscape both inside and outside the firm.

What does it mean to build innovation muscle?  I think of it as the number of people trained, the frequency of using an innovation method, and the percentage of internal departments that have an innovation capability.  Call it an Innovation Muscle Index:  N (number of trained employees) x F (number of formal ideation events per year using a method) x P (percent of company departments with at least one employee trained in an effective innovation method).   IMI = N x F x P .

Building innovation muscle is not much different than building body muscle.  Let's turn to an authority, http://www.muscleprogram.com/, and see how to build body muscle.  Here is an exact quote taken from that website.  Then I have overlaid my interpretation of it from an innovation point-of-view in parenthesis and in bold font.

"You need to decide what kind of (innovation) muscle form you're looking to achieve. Drawing on examples nearly everyone is familiar with, you need to decide if you want to look like Arnold (GE) Schwarzenegger (bigger bulk) or Bruce (Apple) Lee (lean and toned). This decision will help you determine which kinds of exercises you do and how you do them.

Now, with all of that out of the way, let's look at some things you can do to build your (innovation) muscles!

If you don't already, start getting your body (company) used to working out. Start running (innovating) every day, not jogging (brainstorming) or walking (copying others), to help get your blood (growth) moving and your (innovation) muscles primed for building. You're not running a race so you don't need to be a speed demon. Instead, maintain a comfortable and steady pace, taking long and powerful strides (initiatives).

If you want to have the lean, Bruce (Apple) Lee appearance, you need to work with lighter weights and have a higher number of repetitions (innovation workshops) in each set. By doing this, you are toning and shaping your (innovation) muscles into longer and thinner forms. If you want the Arnold (GE) look, you need to work heavier weights (more departments using innovation) and do fewer repetitions. By doing this, you are toning and shaping your (innovation) muscles into short and thicker forms.

Ensure that you have a regular plan, focusing on specific (innovation) muscle groups, and stick to it. Don't try to work every (innovation) muscle in your body every day of the week. At best, this will lead to burnout (budget crunch) and at worst it will lead to injury (downsizing). Your (innovation) muscles will be getting worked hard, so they need to have time to recuperate.

However, you should rotate your plan every month. For example, let's say that you are working on your chest, shoulders and biceps (new products) on Monday; your abdomen, forearms and upper back (new services) on Wednesday; and your lower back and legs (new strategies) on Friday. Every four weeks, rotate one day so that you'll be working on your lower back and legs on Monday; your chest, shoulders and biceps on Wednesday; and your abdomen, forearms and upper back on Friday. The following month, rotate one more day.

This will allow each of your (innovation) muscle groups to take advantage of the fact that you probably workout differently on each of those days. If you simply stick with the exact same schedule forever, then you'll find yourself quickly running into what are known as "plateaus," where you just can't seem to build that (innovation) muscle group past a certain point. With a rotation schedule, you will avoid this problem by giving each (innovation) muscle group the benefit of your natural changing body (company) rhythm.

If you keep these general guidelines in mind and consistently work at your plan with passion and intensity, your body (company) will be more toned (competitive) and shaped (growing) than you ever imagined it could be. While it won't happen overnight, it probably won't take as long as you're afraid it will."

Innovation Diagnostic

Professor Keith Sawyer makes a useful connection between innovation and learning when he writes, "What both innovation and learning have in common is adaptability and improvisationality."  He connects this idea with authors Joaquín Alegre and Ricardo Chiva from the Sloan Management Review.  They identified five core features of high organizational learning capability (OLC) companies: experimentation, risk taking, interaction with the external environment, dialogue, and participative decision making.  Keith has found that these five characteristics also hold true of organizations that use the power of collaboration to generate innovation.  He believes that organizations high in learning ability are more likely to be innovative organizations. 

I am inclined to agree.  The reality though for many organizations is that they may be missing one or more of these characteristics.  Yet they still must innovate to grow.  What would be truly useful is a rigorous innovation diagnostic based on these five characteristics.  This diagnostic could help a company identify where it is weak and where it needs to focus attention and resources.  Here is how it might work.

Experimentation:  The authors define this as the degree to which new ideas and suggestions are dealt with sympathetically by the organization.  Measure this in several ways: the budget dollars spent on designing and running experiements, the amount of new ideas generated, and the percentage of those ideas that challenge the established order as described by Alegre and Chiva.  My observation is that organizations see the value of experimenting more during the hard times than the good times.  Therefore, measuring this characteristic over time would be most useful.

Risk Taking:  Measure employees in terms of their tolerance for ambiguity using established testing methods.  Measure organizational risk-taking in terms of the internal rate of return of projects initiated and rejected.  My observation is that organizations take too little risk not because they cannot bear it from a portfolio point-of-view, but rather from an individual career risk point-of-view.  People, not organizations, are afraid to fail.  They play "not to lose."

Interaction with the External Environment:  The authors define this as the scope of relationships with factors that are beyond the direct control or influence of the organization and include competitors, the economic system, the social system, the monetary system and the political/legal system.  Measure this by the amount of money spent on direct contact with these entities.  Also measure the resources spent to collect information about them.  What is the net aggregage spend on issues external to the firm?  My observation is that firms tend to be very good at observing and monitoring the external world, but few are excellent at interacting with it.  That is the key to leveraging it for innovation.

Dialogue:  Dialogue is a way of spreading information and skills throughout an organization, and it helps create multiple viewpoints.  Measure both the speed, volume, and fidelity of information as it spreads through the firm.  Do this by taking a new issue as it emerges and systematically studying its diffusion.  Identify the information pathways, both formal and informal.  My observation is that firms are improving here.  They see the value in teaching employees how to 1. establish their internal network, then 2. use systematic persuasion principles to influence and change the firm.

Participative Decision Making:  This refers to the level of influence employees have in the decision- making process.  Measure employee satisfaction, motivation, and degree to which they feel involved and engaged.  The Q12 Assessment might be an effective measurement tool in this area.  My observation is that firms have gotten pretty good at this because it correlates to other success factors, not just innovation. 

Alegre and Chiva note that these five characteristics combine to create an excellent snapshot of an organization’s OLC. They suggest that an organization can use surveys and other internal metrics as a way of measuring its ability to learn and innovate. If an organization measures an improvement in its learning capability, it will very likely see a concurrent increase in innovation.