When ideas do make it into the system, they are continually delayed as a series of urgent fires land on people's desks. It's a well-documented, steady slide into commercial irrelevance and often leads to a reliance on discounting to stay competitive.
Great innovators, on the other hand, are intentional about who works on what kinds of innovation. There are several approaches that can work, but in broad terms, operational teams should limit their focus to continuous improvement innovation. These are low-risk, efficiency-focused innovations that are relatively simple to implement and often make the team's day job more manageable. With this approach, there's clear alignment between strategy, innovation and personal motivation.
On the other hand, more transformational ideas fare better in a dedicated team, or "lab", that is strategically aligned to the central business but free to explore beyond the borders of today's operations and business models.
It requires deliberate and delicate governance. But with the right targets, resources and metrics in place, this dual-focus approach to innovation ensures that incremental and disruptive ideas can show up with the right balance.
Takeaway: Do incremental innovation in teams, and exponential exploration in labs.
Overcoming risk aversion
The majority of people never share the best idea they ever had. Why? The personal stakes usually feel too high to share genuinely original ideas. When the personal vulnerability to propose original ideas is lacking, the organisation's future commercial vulnerability increases. We're unintentionally starving tomorrow's innovation pipeline.
The solution is to lower the stakes. Make it safer and more comfortable to take the first meaningful step towards exploring a bold idea.
Great innovators do this by equipping their people to run small, fast, cheap experiments. The aim is to test the biggest assumptions behind bold ideas before spending any money developing them. Don't spend $50,000 building a prototype, spend $500 testing the hypothesis that anyone cares about the problem you're trying to solve. By the way, that untested assumption is the single largest reason that start-ups fail.
By running minimum viable product (MVP) experiments, the stakes of failure become so low that suddenly everyone is comfortable taking the first step in exploring an idea that wouldn't otherwise make it off the whiteboard. And innovation gets democratised.
And there’s a huge upside for leaders: instead of being brought ‘pet’ ideas or hunches to invest in, teams come with real data that increases the chances of making good investment decisions.
“Experiments changed everything,” says Pernod Ricard UK’s former Managing Director Denis O’ Flynn. “We stopped asking for ideas and instead asked for experiments that came with data to help take the guesswork out of decision-making.”
Takeaway: Teach people to run low-stakes experiments that free them to dream big, start small, and learn fast.
