09 August 2010

Why Innovation Centers Fail

Innovation is inherently difficult because the innovations have never been made before. There's no guidebook, rulebook, or template. Organizations can only execute to determine if a solution will work or not. Most organizations are poor at innovation. Why? They usually don't have confidence in the process of grinding it out, and they are unwilling to let a project fail fast (or even accept mistakes). Without mistakes and failure nothing is learned to inform the next project or next possible solution set. Without the support and resources to make mistakes and fail, innovation will not occur. Here are some of the other reasons an "Innovation Center" (whether they be academic, corporate, or public) can easily fall short.

Legal Problems.
Legal clarity is important. However, in the innovation game, there's plenty of data that shows that confidentiality agreements and onerous contracts early in the process do not protect anyone, and only waste time and energy. Furthermore, innovation departments often need to chart new paths for organizations and partners where law has not been thoroughly established. Innovation is inherently new.
Counter action:
1) Realize that it is best to look backward with legal, not forward in an innovation center.
2) Consider open sourcing all solutions and publish the results for others across the globe to use and replicate.

Fiscal Flexibility in Bureaucracies or the Public Sector.
Getting bids and utilizing selection criteria that mask the traits of innovative contractors diminishes innovation center efficacy. Agility and failing fast are necessary in effective innovation offices because technology changes every three months or so. If the bidding process takes three months on average to process then everyone loses. Using small amounts of money quickly is rewarded with feedback that either signals success or failure. The ability to transfer money and make decisions quickly is tough in bureaucracies.
Counter action:
1) Generally a few methods exist to support flexibility but these will need the direct support of the head of the organization (think President).
2) No bid contracts and using public corporations or foundations (used more in public university settings) to issue money.

Placing Innovation under a Rock.
Crazy. Foolish. Wasteful. Defiant. Infringing. These words will be use to describe all of the activities of innovation centers and more. Other departments and leaders in the organization will invariably not support innovation activities because innovations eventually mean change. Stopping actions in the innovation center through many methods prevents change from coming for these leaders and employees. We generally call these change prevention practices and they lead to failure of innovation centers.
Counter action:
1) The most successful innovation centers report to the CEO, Mayor, or head of the organization and him/her alone. Nesting the innovation center or having it report to two or more leaders invariable stifles innovation.
2) Normal rules cannot apply to the innovation group. By its very nature the innovation group needs to operate in an environment that has no rules. It needs to be protected to flourish – otherwise the planted seeds will be “crushed” before germination.
3) Change prevention teams work to reduce adoption of proven solutions killing the return on investment in research and development; the only counter point is the support from the head of the organization to adopt.

Coordinated or Unorganized Change Prevention Teams.
Change prevention teams will be present during all phases of project development and adoption. It is very easy to say no – it means less effort and time for the department being changed or people being acted on.
Counter action:
Reward risk and provide incentives for people to change and work with the innovation department.

When handing off a successful project, innovation departments often find that the final resting place for an innovation will resist adopting the solution because they were not included in the development of the solution. It happens a lot in major companies all the time. This kills the return on the research and development investment.
Counter action:
1) Create innovation liaisons in each department to provide input throughout the development of innovation project.
2) Create incentives for adoption.

Accepting Failure.
Innovation is about taking risks and seeing the results. If failure is not an acceptable outcome, then you aren’t risking anything and you will only be making incremental changes rather than innovating. Incremental change is not innovation; it is development. To double the real successes in innovation centers, you need to double the failure rate. Furthermore, failing at a slow rate wastes time and organization money.
Counter action:
1) Rapid prototyping with constant feedback loops is the best route to success.
2) Kill bad projects early when the writing is on the wall and learn from them.
3) Give away the success and failures so that others may learn from the projects.
4) Publically acknowledge failures along sides success to support cultural change.
5) Reward good failures equal to good successes.

Not Expecting Success.
Day-to-day the innovation needs to focus on how the organization will look when it gets it right. Most of this can be solved with vision. It is hard to innovate without a distinct purpose and passion.
Counter action:
1) Create an innovation agenda
2) Issue “Grand Challenges” to focus on what the future looks like when the innovation center succeeds

Disciplinary Focus.
Innovations occur at the intersection of disciplines. Innovation offices need a group of innovators from all walks of life. Only having programmers or only having engineers will perpetuate incremental changes.
Counter action:
1) Interdisciplinary teams will succeed more than singularly focused teams. This means having different team members from many disciplines on the team.
2) Especially in less technologically focused organizations, select those individuals that are high on execution and have knowledge of the scientific method.

Killing Enthusiasm.
Exploring the unknown is tough because more is at stake than money. Bravery, initiative, and excitement are also on the line. Capturing energy, amplifying it, and building on new ideas is the order of the day. Innovation centers that have poor morale take ideas and make them smaller, instead of making them bigger. This changes the return on investment.
Counter action:
1)Select innovators with high energy, self starting mentalities.
2) Accept that when innovators dream big they seem crazy and other leaders in the organization will treat them as such.

The Value of an Idea.
There is not a shortage of ideas in innovation centers. In bad innovation centers there is a shortage of execution. Successful innovation teams build and build fast to prove something out and then go back and sort out the details and polish it up. They do not design silver bullets. They find real bullets at the end of the process and polish them up into silver bullets.
Counter action:
1) Take quick small actions early in the process on multiple fronts using an options management philosophy. This will catalyze execution early on a project.
2) Get feedback early and often during rapid prototyping stage.

Teams are not created equal.
Innovation centers will often be asked to partner with another department to help it innovate. Not all departments are created equal. Innovation departments need to work with proven partners that have change momentum.
Counter action:
1) If a department is not oriented for change it is best to conclude a project early but respectfully if it does not meet a threshold of innovation culture.
2) Be mindful of resource allocation and human capital expenditure when partnering. If the contributions are not equally with the innovation center giving more, then re-evaluate the project.

Who Decides?
It does not make sense to work on a line of innovation unless it is clear in advance who must say yes to adopt it. As discussed in the section change prevention teams, we know everyone can say no.
Counter action:
Innovation centers need to intentionally limit the number of people who are allowed to weigh in and are clear to themselves and their potential partners about exactly who can (and must) give the go ahead.

Not Measuring.
There cannot be success without deciding how success is defined on a project-by-project basis. Each project will be different. Money is often used as a measuring tool, but in innovation departments, alternative measures need to be included as well.
Counter action:
1) When project is scoped, the innovation center needs to define the measures that can be used to determine the extent or degree of success.
2) Leaders and decision makers need to agree to the measures and communicate them to stake holders in advance.

Bad Process.
Bad innovation centers waste time in endless meetings with random vendors and internal naysayers and even hassle about tiny details up front. They do not actually get things done.
Counter action:
1) Good innovation centers have an agenda and a project manager's understanding of what it means to get things done.
2) They publish the process and share it with anyone who wants to know.

Poor Context.
You cannot create value in a vacuum. Yet organizations do not provide the specific context for innovation occur.
Counter action:
1) Build co-working environments and project spaces for the innovation office.
2) Avoid traditional office trappings and introduce objects that encourage “play”.
3) Silo or separate the innovation team to remove social and other pressures not to build sweeping solutions.