Thomas A. Stewart, editor of Harvard Business Review, and Rosabeth Moss Kanter, professor of Harvard Business School, declare that innovation is cyclical at most companies in "The Great Wheel of Innovation" and "Innovation: The Classic Traps." As a matter of fact Kanter asserts that "innovation gets rediscovered as a growth enabler every half dozen years." Can companies afford an innovation cycle that repeats every six years? We know from such great innovators as 3M, Apple, and Toyota that innovation is not a one-off experiment, rather a sustainable process that must be always on. Why then companies often fail to sustain innovation?
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
Cause And Effect
What causes the cycle of innovation? Stewart talks about the erosion of “institutional memory” as one of the primary drivers of the innovation cycle. Erosion happens due to change in labor markets, 20% voluntary turnovers and intra-company movement of individuals and associated memories. The key challenge companies have is creating processes in place to preserve the memories, the knowledge acquired, the insights gained on not only what worked well in the past, but also what did not work well, so that mistakes are not repeated on planned innovations. When companies push to find new ways, old mistakes repeat, thereby creating the long cycle of innovation. Stewart refers this as the great paradox of innovation - it's not about creating new innovations, rather repeatable processes that define how to create innovations.
Avoiding The Innovation Cycle
Kanter stresses that grand declarations of innovation are often followed by mediocre execution that produces anemic results. Kanter echoes on “four major waves of innovation enthusiasm” she's observed, and describes the four “classic mistakes companies make in innovation strategy, process, structure, and skills assessment.” These four mistakes need to be overcome if companies want to maintain their innovative output and become lasting companies. We had earlier talked about six ways to find innovation, and processes to unblock creativity and innovation. Some of Kanter’s proposed views draw similar insights.
Common Innovation Blunders
Kanter gives many real world examples of common blunders that companies make as they try to build new innovations:
1. “A typical strategic blunder is when managers set their hurdles too high or limit the scope of their innovation efforts.” Case in point: Quaker Oats was making minor tweaks to its product formulas in the 1990s that it missed larger opportunities in distribution.
2. “When managers strangle innovation efforts with the same rigid planning, budgeting, and reviewing approaches they use in their existing businesses--thereby discouraging people from adapting as circumstances warrant.” When a company builds too many systems and processes to create efficiencies, innovation suffers.
3. “Companies must be careful how they structure fledgling entities alongside existing ones to avoid a clash of cultures and agendas.” Another example Kanter provides is when Arrow Electronics tried to create an online venture.
4. “Companies commonly undervalue and underinvest in the human side of innovation--for instance, promoting individuals out of innovation teams long before their efforts can pay off.” Again, we had discussed a lack of reward and recognition system for innovators in particular.
Innovation At Your Business
What are your views on creativity and innovation at your business? Do you have defined processes in place to create sustainable innovations? For instance, top innovators such as Google who “allow their brightest minds time to experiment” while keeping a tremendous focus on “simplicity and the customer,” and Proctor and Gamble, whose “connect and develop model calls for 50% of products to come from outside” and where “design and innovation execs are part of the org chart.” Share your insights on whether innovation is cyclical at your business.
What causes the cycle of innovation? Stewart talks about the erosion of “institutional memory” as one of the primary drivers of the innovation cycle. Erosion happens due to change in labor markets, 20% voluntary turnovers and intra-company movement of individuals and associated memories. The key challenge companies have is creating processes in place to preserve the memories, the knowledge acquired, the insights gained on not only what worked well in the past, but also what did not work well, so that mistakes are not repeated on planned innovations. When companies push to find new ways, old mistakes repeat, thereby creating the long cycle of innovation. Stewart refers this as the great paradox of innovation - it's not about creating new innovations, rather repeatable processes that define how to create innovations.
Avoiding The Innovation Cycle
Kanter stresses that grand declarations of innovation are often followed by mediocre execution that produces anemic results. Kanter echoes on “four major waves of innovation enthusiasm” she's observed, and describes the four “classic mistakes companies make in innovation strategy, process, structure, and skills assessment.” These four mistakes need to be overcome if companies want to maintain their innovative output and become lasting companies. We had earlier talked about six ways to find innovation, and processes to unblock creativity and innovation. Some of Kanter’s proposed views draw similar insights.
Common Innovation Blunders
Kanter gives many real world examples of common blunders that companies make as they try to build new innovations:
1. “A typical strategic blunder is when managers set their hurdles too high or limit the scope of their innovation efforts.” Case in point: Quaker Oats was making minor tweaks to its product formulas in the 1990s that it missed larger opportunities in distribution.
2. “When managers strangle innovation efforts with the same rigid planning, budgeting, and reviewing approaches they use in their existing businesses--thereby discouraging people from adapting as circumstances warrant.” When a company builds too many systems and processes to create efficiencies, innovation suffers.
3. “Companies must be careful how they structure fledgling entities alongside existing ones to avoid a clash of cultures and agendas.” Another example Kanter provides is when Arrow Electronics tried to create an online venture.
4. “Companies commonly undervalue and underinvest in the human side of innovation--for instance, promoting individuals out of innovation teams long before their efforts can pay off.” Again, we had discussed a lack of reward and recognition system for innovators in particular.
Innovation At Your Business
What are your views on creativity and innovation at your business? Do you have defined processes in place to create sustainable innovations? For instance, top innovators such as Google who “allow their brightest minds time to experiment” while keeping a tremendous focus on “simplicity and the customer,” and Proctor and Gamble, whose “connect and develop model calls for 50% of products to come from outside” and where “design and innovation execs are part of the org chart.” Share your insights on whether innovation is cyclical at your business.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
If you enjoyed reading this Innovation best practice, I recommend the complete list of Creativity Innovation Best Practices.
References:
Harvard Business Review
BusinessWeek
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