Disciplined innovation may sound like an oxymoron, however, it is not. As Gary Pisano explains in the most recent Harvard Business Review – The Hard Truth about Innovative Cultures -, you need both. That makes creating a culture for innovation a difficult balancing act. The process can be messy, but it needs discipline and management.
The hard truth about innovative cultures
In the article, Pisano highlights that while many companies like to embrace the culture of innovation, few do it with the discipline that is needed to make innovation efforts pay off.
Five tensions to manage
Pisano brings up five tensions that managers responsible for innovation activities must manage, for innovation to be successful:
- Tolerance for failure, but no tolerance for incompetence
- Willingness to experiment, but highly disciplined
- Psychological safe, but brutally candid
- Collaboration but with individual accountability
- Flat but strong leadership
As these tensions are somewhat paradoxical, it is not easy to maintain the balance between them.
In too many organizations, the unpredictability of innovation process becomes an excuse for not providing structure, setting goals, or measuring performance. For example, in organization A, a few of the lesser performing divisions used innovation projects to give home to employees that were not productive and burning through their unbillable hours budget. It other words, the innovation budget was used to boost their billable hours metrics. As a result, with little to show for, while the overall productivity of the organization plummeted, this innovation budget got cut. With it, killing all of the organization’s innovation activities.
Contrast that with organization B. They invest a significant sum of money in research and development. Yet, the value of the ongoing research and the outcomes of these projects have never been challenged. Researchers involved in projects that lead to commercial success are equally rewarded as their peers that produced no tangible results, even after 5+ years of trying. This organization is unnecessarily wasting a lot of valuable resources, which is unsustainable in a competitive market.
Meantime, providing structure, metrics and setting goals is not easy. Commonly used stage gate processes quickly can become stifling.
Innovation does not benefit from a cookie cutter approach. That is, the use of standardized processes and the use of outcome metrics that are so commonly used on the operational side of the organization.
Organization C uses the predicted profitably and ease of implementation as approval criteria. While this may sound like a good idea, in practice it means only relatively certain innovation projects with a small scope obtain approval. No larger and more ambitious initiatives ever pass these initial gate criteria. As a result, the company has missed major opportunities and is losing profit.
The focus on outcome measures, as used in organization C, is nearly always detrimental, as the outcomes of innovation projects are notoriously difficult to predict. Small initiatives can lead to big things, large initiatives can lead to nothing. Outcome predictions are educated guesses at best.
The use of progress and output measures are therefore a better way to assess the potential of innovation projects and to manage your innovation pipeline.
Innovating effectively and efficiently
To get the most out of your innovation efforts, you need disciplined innovation. However, bringing discipline to the innovation process, is difficult, as it requires balancing the tensions mentioned by Pisano. You can achieve an unstable equilibrium at best. The innovation process is a balancing act that needs to be monitored and adjusted frequently.
In sum, innovation is a process that requires to be managed!
For the full article, see the January 2019 version of the Harvard Business Review