Why Innovation Makes Executives Uncomfortable by Jeffrey Phillips


Why Innovation Makes Executives Uncomfortable

by Jeffrey Phillips

Why Innovation Makes Executives UncomfortableI’ve been working in the “innovation field” for over seven years as a consultant, and I did regular “innovation” work for a number of years previously, so it is with a bit of chagrin that I come clean on the fact that it finally occurred to me why innovation makes many executives uncomfortable. I think if you are constantly reinforcing a belief system (innovation is good!) that it can be very hard to get a different perspective, and even understand why that other perspective exists. So for years I have labored under the assumption that others saw innovation as a valuable capability and commodity, just as I did.

Over the last few months I’ve been disabused of that notion, by working with executives and others who helped me understand why innovation makes them uncomfortable. And let me say my conclusions about why innovation makes executives uncomfortable surprised me a bit as well.

I’ve struggled with this, because I’d like to create a nice, neat taxonomy about the barriers for innovation. So far I have three categories or typologies, but as you read this, feel free to contribute your own in the comments section. I’d be interested to hear what you think. Recognizing there are several different kinds of reasons that innovation makes executives uncomfortable may help you become better at answering their questions and resolving the constraints on innovation in your business.

The first typology is based on the belief that innovation requires skills that the business doesn’t have or reinforce. On the surface, this may seem obvious. Innovation seems to be about incredible breakthroughs in research, or insightful observations about customer needs and wants in the future. But when you really break it down, innovation requires a different set of skills from those we inculcated in our organizations. Here’s a simple dicotomy:

  • Innovation requires ART not SCIENCE
  • Innovation requires QUALITATIVE insights not QUANTITATIVE statistics
  • Innovation requires HUNCHES not FACTS
  • Innovation requires RISKS not CERTAINTIES

In other words, we already have all the skills we need in order to innovate, we just don’t emphasize or rewards those skills. Innovation is still much more of a craft than a science, more artisan than automaton.

However, many of our executives were bred in the scientific management school of thought, which requires breaking down actions and phases of work into minute detail and describing and optimizing the action. As Brownian motion fans can attest, you can be certain of the location, or speed, of a particle, but not both. The same is true of these innovation skills – they are important, but can’t be scientifically managed.

The analogy would be a kindergarten taught by quant jocks. The kids wouldn’t have any fun, being forced into doing very specific and rigid tasks, and the quant jocks wouldn’t like the freeform play and idea creation of the kids.

The second typology is based on the fact that innovation is fairly unpredictable. This is increasingly true as the amount of disruption possibility increases. Again, we have executives who have been taught to believe, and their compensation reinforces, that businesses are organizations which produce regular, steady outcomes in the face of any environmental uncertainty or economic chaos. Innovation doesn’t work to our clocks or schedules, ideas and needs arise as customers preferences and situations change. Few executives are interested in the change inherent in really disruptive ideas, even if they have a substantial increase to the top or bottom line, because of the amount of change those ideas may introduce, and the ancillary effects of those changes. Most executives would happily trade regular, consistent growth in the low single digits to wild swings in growth based on occasional disruptive ideas.

The analogy in this instance is to a baseball player. Most managers would prefer a hitter with a .300 batting average who hits singles and doubles, over a .275 hitter who hits homers or strikes out.

The third typology is based on the fact that innovation ultimately places someone else in control. Many senior executives kid themselves that they are responsible for the success of their businesses. We are guilty of admiring people who make the cover of Fortune or Forbes, only in hindsight to wonder what we were thinking. Anyone remember Chainsaw Al for example? It is their insight, strategies and leadership that makes all the difference. In a fast paced, ever changing world, executives who create a vision and then engage the best in their people will be successful, but they must abdicate some of the decisions to those people. Innovation is rarely the provenance of one individual. Apple is probably the exception that proves the rule that most organizations have tens, if not hundreds of individuals actively involved in innovation. Yet the more innovation that happens in an organization, the less control the CEO has about products, and strategy, and direction. Unless, again like Apple, everyone understands with great clarity the strategy and goals and direction, and innovation is completely governed by that vision. Since most organizations lack that central clarity, innovation becomes rapidly dispersed throughout the organization, and the senior executives have little control. Therefore innovation is tightly controlled if allowed at all, since too much innovation may mean the loss of control.

So, to recap, I’ve found that innovation makes executives uncomfortable for at least three reasons:

  1. A different set of skills are required than are supported or reinforced
  2. Executives prefer humdrum predictability to wild swings in revenue and profits
  3. The more innovation, the more likely the executive team is to lose control of the business

Now, note that I didn’t incorporate some of the “easy” reasons why innovation makes executives uncomfortable, like:

  1. Innovation costs money
  2. Innovation takes resources

Those two arguments are specious at best. Every new product, new acquisition, new initiative requires money and resources, so at the heart of the matter, these aren’t arguments against innovation. There’s something more relevant under the surface when these arguments are used.

Additionally, I didn’t use one I know to be true: in this environment, there’s much more to be gained in cost cutting and right sizing than in innovation, since cost cutting has an almost immediate return to the bottom line, whereas innovation has at best a possible return down the road.

The reason I didn’t include that alternative is that while it is true, it can only be true for so long. A firm that cuts 5% of its cost base every year will shrink to nothing in less than 15 years. Eventually, every firm needs new product, services and offerings to grow. So this is only a temporary reason not to innovate.

So, that’s my typology. I’d be interested in your thoughts. Also note that once you can get past the “we don’t have enough time” or “we don’t have enough money” arguments, understanding which of the other reasons actually block innovation will give you an opportunity to create evidence to reduce the concerns for each of the three typologies, which you’ll have to produce in order to innovate.

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Jeffrey PhillipsJeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.

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