Despite its buzzword status, corporate innovation is thriving. To succeed, we must shift from mythology to methodology, embracing failure as a prelude to greatness. Sustainable progress comes from a structured approach that solves specific business problems across your entire value chain.
A quick search on ‘corporate innovation’ yields thousands of results. Some say corporate innovation is dead, others say it’s a dirty word. Yet simultaneous to its supposed demise or dirtiness, the word innovation is now being used as a new brand for IT departments, a moniker for a GO transit station, and as a way to do banking (if only that’s all it took to solve our economic woes!). While the buzzwordification of innovation has perhaps diluted our common understanding of the term, corporate innovation is very much alive and well.
Let’s examine common myths and misconceptions that will help you review - and perhaps refresh - your understanding and approach to innovation.
Myth 1: Failed innovation projects are not valuable (and are to be avoided)
Innovation’s favourite F-word: Failure. If I had a rock band (a not inconceivable idea for me), I’d name my band Fail Forward. Failure is an integral part of innovation. When endeavoring to achieve meaningful disruptions or transformations, organizations should expect material failure rates across their stages of product development:
Many view failed projects as a result of poor governance, but true failure lies in not learning from these experiences. 3M's post-it note success is an awesome case study of how insights from a failed project can lead to massively profitable innovations.
I have embraced my own fair share of failure. One memorable example took place in the early 2000s in my role as CIO for a global strategy firm. An avid concert goer, I saw an opportunity to expand audience reach and enhance the fan experience in those pre-smartphone days by streaming live concerts. We took our idea to a concert production company and they invited us to present the concept to the Rolling Stones, who loved the idea. However, the Stones didn’t feel the Internet was stable enough yet and the last thing they wanted for their brand was to have somebody streaming and screaming that they “can't get no satisfaction.”
While the idea was innovative, it was not feasible at the time to deliver the desired quality of customer experience consistent with the brand. Technology has since made such concepts a viable and essential component of the concert experience, placing this failure squarely in the category of timing is (almost) everything. But poor timing isn’t the real reason we fail at innovation. We fail so we can learn - and learn quickly. Failure isn’t a finale. It’s a prelude to innovation’s greatest hits.
Myth 2: Advanced technology will drive innovation
Many innovation teams focus too heavily on technology without considering the necessary psychological and sociological aspects for successful implementation. I cannot stress enough the importance of starting with specific problems to guide the innovation process effectively.
Innovation is not just about technology. How are you using the other critical ‘olologies’ - psychology and sociology - tapping into how people think, behave and interact? Google Glass was technologically impressive but failed commercially because it didn't account for social dynamics. Despite advanced augmented reality capabilities, people found the glasses awkward to wear, and there were privacy concerns about the built-in camera. Even cutting-edge technology fails when psychological and sociological factors aren't considered.
We also need governance that enables us to experiment with advanced technologies while keeping an eye on market receptivity. Governance is about how we organize and keep ourselves accountable; how we make decisions; and how we manage risk. All things that are important to effectively managing innovation inside the enterprise so that we can experiment and learn without having the experiment run away on us.
Myth 3: Innovation is about achieving the moonshot
NASA studied 1,600 4- and 5-year-old children, and 98% scored as “creative geniuses.” This percentage dropped to 30% at age 10 and down to 12% by age 15. By the time the participants hit adulthood, the percentage dropped to 2%. That means that in a group of 100 adults, only two are creative geniuses.
Using the NASA study we could argue we are born to be innovative. But we learn - and are rewarded or discouraged accordingly - that the goal of innovation is to hit the moonshot. Most innovation is not a brain-busting a-ha moment. Sustainable success begins with the business problem and takes discipline to create actionable business cases. It's also about building a culture that gives you back that childlike freedom to explore and create without fear.
The most innovative organizations balance the potential for moonshots with the understanding that not everything needs to be revolutionary. This approach creates space for incremental innovations to flourish—the singles and doubles that, over time, can be just as valuable as the occasional grand slam.
Myth 4: Innovation focuses on new products for market
Innovation programs are often heavily focused on new product development, versus other fundamental types of innovation. Product-focus is a narrow view that ignores other crucial areas like service offerings, business models, pricing strategies, and even management practices. A broader perspective recognizes that any part of the value chain can be transformed through innovation. Do you focus on other types of innovation such as channel innovation (how your offerings are delivered), network innovation (how you connect with others to create value), or customer experience innovation (how customers interact with you)?
The iPhone isn’t the best “product” in its class. In objective terms, it’s not superior to some Android alternatives. However, the iPhone wins on user experience, consistently delivering a polished and user-friendly interface and seamless integration within the Apple ecosystem. Had the innovation team at Apple focused entirely on product, they may not have gained such market dominance. (To learn more about the types of innovation, check out The Doblin framework)
Myth 5: Corporate ideas can only be incubated and accelerated in a lab
As Deloitte points out in its report on corporate accelerators, hundreds of companies are attempting to spark digital innovation “with a page from the Silicon Valley playbook.” Different accelerator adoption models exist - some in-house, some outsourced - and certainly many organizations have achieved rapid R&D in addition to insights into emerging technology and trends.
While an accelerator lab can bear fruit, in my observation many innovation labs amount to little more than make-believe. According to a report from Capgemini, the vast majority of innovation labs — up to 90%, one expert says — fail to deliver on their promise. We can certainly consider an accelerator as a possible component of the corporate innovation mix. But it must be done so intentionally and with a very clear set of goals, close alignment with business strategy, and the support for ideas grown in the lab to see the light of day when they leave the lab.
Can innovation occur outside of a lab? Absolutely. A rock band doesn’t need a stadium in order to put on a good show. If your innovation lab behaves more like innovation theatre than it does as a true accelerator, it isn’t worth the coffee and kombucha that fuels it.
Myth 6: All successful innovation is good for business
Data from the Organization for Economic Co-operation and Development shows that Canada ranks among the highest in public R&D investment but among the lowest in innovation outcomes such as productivity growth and technology adoption. Despite our good intentions, we are not making good on our innovation opportunities.
It’s key to consider how you define innovation success and the importance of that being clear across the organization (as well as country). Do we define innovation success as R&D that's technically feasible? Solutions that get to market? Specific impact metrics once solutions are deployed?
Xerox PARC's Graphical User InterfaceXerox shows us that not all successful innovation is good for business. PARC developed the first graphical user interface (GUI) with icons, windows, and a mouse in the 1970s. While technologically revolutionary, Xerox's leadership didn't see how this innovation aligned with their core copying business and lacked the business direction to capitalize on it.
Corporate innovators would be wise to carefully consider where to invest in cutting-edge R&D, where to invest in commercialization, and where to invest in process and productivity improvements.
Innovation is an enduring human quest that is fundamental to value creation and sustained progress. We must each examine our notions of innovation and shift from mythology to methodology to find - and make the most of - the opportunity-rich path ahead.
Curious how your innovation investments are tracking? Why not start with a NorthGuide Innovation Audit. We’ll help you position yourselves as Innovation Rockstars vs. One Hit Wonders.
To learn more about corporate innovation and corporate innovation audits, read Disruption is the new normal. It's time to reboot innovation by Terry S. Stuart, Vice Chair, NorthGuide and reach out to the NorthGuide team.
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