This piece is excerpted from the new book Unlocking Innovation: A Leader’s Guide for Turning Bold Ideas into Tangible Results, by Robyn Bolton. Bolton is Founder and Chief Navigator of the firm MileZero, and she was previously a partner at Innosight and a consultant and project leader for The Boston Consulting Group.
• • •
The ABCs of Innovation
The ABCs are different from the usual corporate innovation approach because they require you to actively build (no delegating!) Three very different things in very different ways over the course of three years. So before you learn about the ABCs and what you’ll do, it’s important to know why you need to do so many different things in different ways for so long.
Three Years of Innovation
To understand why 90 percent of corporate innovation incubators and labs are shut down within three years, it’s helpful to understand the pattern that the rise and fall of corporate innovation efforts looks like.
Year 1
Year 1 is great because everyone is excited. The C-suite is excited because they can point to you, your team, and your budget as evidence that innovation is a strategic priority and that they really are committed to creating the next version of the company. You’re excited because you finally have the freedom to create something, change the things that are broken, and chart a new path for yourself, your career, and your organization.
Life is rainbows and unicorns.
Well, except for the quarterly update meetings. At first, they’re excitement-filled story swaps about all the cool things you and your team are doing and the interesting things you’re learning. However, they gradually become less about stories and more about PowerPoint slides, data charts, and questions about ROI and when you’ll start producing results. But you’re not worried. Innovation takes time, and all those questions about results are from people who just don’t get it. You’re making progress and learning a lot. You have results, just not ones that can be measured in dollars and cents (or euros, kroner, Pesos, or any other currency).
Year 2
You carried the momentum from last year into this one. Your team is doing great, working together like a dream with just the right amount of tension and debate. People from other parts of the organization are curious about what you’re doing and may even ask you to host a lunch-and-learn or a training session for their team.
Life is sunny skies and a gentle breeze.
Your stakeholders don’t care about the customer insights you’ve unearthed or how you’re using them to design disruptive products and radical business models.
But those quarterly meetings are getting irritating. Your stakeholders don’t care about the customer insights you’ve unearthed or how you’re using them to design disruptive products and radical business models. They don’t even care that you shared what you learned with other teams in the organization so they could benefit from your fantastic work. All they seem to care about is revenue, ROI, and time to break even.
It doesn’t help that there are rumors that a recession will start in six months, core business revenue is coming in below expectations, or supply chain shortages could result in missed shipments. But those aren’t your problems. Those are the core business’s problems. Problems that innovation will one day overcome and render obsolete.
Year 3
The core business’s problems are now your problems. Someone got spooked, and budgets got cut. There’s a hiring freeze, and all spending must now get president-level (or higher) approval. Your plans to run a few pilots and maybe even a limited launch this year are on hold as those resources are needed elsewhere, specifically in the core business, where they have a known and guaranteed ROI.
All those people you helped last year are suddenly too busy for the coffee or follow-up chat you scheduled to check in on how they and their teams are getting on with the new tools and templates you shared. Demand for hackathons, shark tanks, and field trips to Silicon Valley evaporate as people hunker down, focusing on their daily tasks and worrying about potential layoffs.
Life is rainstorms with the chance of apocalypse.
As for those quarterly meetings, they still happen, but fewer people attend. You try to schedule one-on-one meetings to follow up with the people who couldn’t attend, but they’re all too busy. Ultimately, you start canceling meetings because most stakeholders have “sudden and unavoidable schedule conflicts.”
Your boss also mentions that because innovation is now a cost center and it’s unclear how much demand there is for your services, your budget is slashed, and your team is now you and one other person.
At the end of the year, your boss thanks you for all your work, assures you that innovation is still a priority, and then informs you that the organization needs you to be an enabler, not a creator, so your team is reorganized into a center of excellence, focused on training teams that express interest. Your boss also mentions that because innovation is now a cost center and it’s unclear how much demand there is for your services, your budget is slashed, and your team is now you and one other person. Your boss reassures you that you’ll keep your title and pay, but you’ll now report to someone who was previously your peer because your boss is too busy with more important priorities.
The apocalypse arrived.
Innovation went out not with a bang but with a whimper.
But here’s a hard fact: you’re not the victim, and you could have been the savior.
Most people read this story, shake their heads, and say, “What a shame. If only the poor innovation executive had more time. If only a recession hadn’t hit, the largest business line’s revenue hadn’t dropped, or the supply chain hadn’t hiccupped, everything would be okay. The budget wouldn’t have been slashed, the head count wouldn’t have been cut, and those annoying, short-sighted stakeholders would have asked the right questions at those quarterly meetings.”
It’s easy to play the victim if this is your story. Most managers do. They point to everything outside their control that causes problems, slows them down, and blocks their progress. They don’t see the dozen or more things they could have done to prevent problems or minimize the impact of changes.
The fact is that there is always an economic worry on the horizon, a financial metric coming in lower than expected, or an operational hiccup. People always ask tough questions, demand quantifiable results, and try to undercut you when you can’t produce. There are always executives who prioritize short-term decisions and immediate results over long-term growth and a legacy of innovation.
Managers, like the one in the story, use things outside their control as excuses.
Leaders see them as challenges.
Innovation leaders see them as opportunities.
The ABCs of Innovation and Growth
As a leader, you know you can’t spend one fiscal quarter focused only on finance, neglecting everything else, then the next quarter focused on marketing, and so on. You need to keep an eye on everything, monitoring and managing the intersections and leading the whole business, not just pieces and parts. You take a holistic approach to managing your core business. And yet most innovation approaches focus on pieces and parts—devising an innovation structure and process, or developing lots of ideas, or building a culture of innovation. The ABCs are a holistic approach to innovation, combining all the required elements and helping you design, manage, and evolve them
Together for lasting success.
They’re also not really the ABCs. They are, technically, the BACs because the B, behavior, is the most important element. It’s the one that only you can do. Without it, nothing else matters. So I always write about behavior first. Why then do I call them the ABCs? Mostly, it’s because ABC is easy to remember—but also it’s because BAC makes me think of blood alcohol content. Which is not what we’re here to talk about.
B Is for Behavior
Behavior is where successful innovation leaders start. They know that their motivations and aspirations matter as much as the numbers the C-suite expects them to produce. They understand that innovation and operations are entirely different worlds and that what made them successful in one area dooms them in the other. They are aware that everything they say and do is interpreted and analyzed by people across the organization as signs of whether innovation is a strategic imperative or a management flavor of the month.
This is, by far, the most challenging and essential part of the ABCs, because you are the only one who can do the work. Most executives claim they don’t have time to do this work. Innovation leaders know that “I don’t have time” means “It’s not a priority,” and there is no greater priority than being the leader that innovation needs. Behavior is the key, which means you’re the key.
A Is for Architecture
Architecture is the strategy, structures, processes, governance, metrics, incentives, and all the other left-brained, logical, tangible, business-y stuff that determines how your team works, how decisions get made, and whether or not progress is happening.
It’s where most executives start. It’s familiar, and they’re confident that because they have managed people, processes, structures, metrics, and governance before, they can do it again. They believe it’s a safe place to start because it looks and feels like operations, so investments and activities can be easily explained to more senior stakeholders.
It’s the wrong place to start. Every organization is perfectly designed to achieve the results it achieves. If you start designing and building before you know what you want to achieve, you’re likely to build the wrong thing. Even if the CEO told you to build a $250 million business in three years, other results must be factored into how your team operates. Building a newer or better mousetrap is a bad approach when you’re trying to catch a unicorn.
C Is for Culture
Culture is values demonstrated through behavior. You get to create your team’s culture but not your organization’s. That already exists, and you must work with it, slowly and over time.
Creating, or even recreating, a culture of innovation across an organization is often a lagging indicator that results from a prolonged commitment to and investment in architecture and behavior. It’s also terribly fragile. A single executive change often spells doom not just for the team but also for the culture. But there are things you can do to accelerate the creation of a culture of innovation and, ideally, build one that can outlast the leadership, investment, and economic changes that threaten it.
C is also for cookie. You’ll need those too. I recommend chocolate chip.
Onward!
Robyn Bolton, Founder & Chief Navigator of MileZero, works with senior executives at medium and large companies on innovation and growth projects.
