Guest Blog – Innovation is a Company Wide Responsibility

In my region of the country, the high cost of housing combined with inadequate funding for housing assistance has created a growing homeless population, with “tent cities” sprouting up in vacant lots and along bike paths. Once a person loses stable housing, they have exponentially more difficulty maintaining a job, keeping their kids in school and staying healthy. It takes a special kind of person to work with people in such extreme poverty. For most people who have a middle-class background, the lifestyle of a person who cannot seem to hold down a job, maintain stable housing or provide adequately for their children seems chaotic, confusing and frustratingly self-perpetuating. It takes a lot of empathy, patience and healthy detachment to provide for the immediate needs of the people on the margins of society and to help them find permanent solutions to their many problems – innovation a company-wide responsibility.

Some authors in the innovation space claim that innovation requires a special kind of person. These writers seem to believe that the people running the current business are not capable of generating new ideas – and shouldn’t be given responsibility for doing so, because that would distract them from their core mission of increasing operational efficiency in the current business. But when a company places its future in the hands of “innovation specialists” who are disconnected from the core business, the company increases the likelihood that its innovation efforts will fail, because they’ve turned fluid organizational boundaries into brick walls, because innovation is a company-wide responsibility.

Innovation Requires Fluid Organizational Boundaries
These authors attempt to divide the company’s business into buckets with one devoted to the current business that is all about operational efficiency and incremental change, and another that is about delivering organic growth through breakthrough innovations. They’ll talk about how the Growth Team needs to consist of creative people chosen for their ability to think broadly and seek out new things, while the Current Business team is expected to just keep turning the engine that generates profits through servicing existing customers and markets. Some authors claim that there should be no overlap at all between Growth Teams and Current Business Teams.

These authors never talk about what happens after an innovation program reaches sufficient maturity that it’s ready to leverage the organization’s resources into a successful implementation. If the innovation team is going to build its own supply chain, manufacturing capability (in-house or outsourced), marketing team and salesforce, what’s it doing inside the company at all? If the innovation team expects to leverage the parent company’s capabilities, then the earlier these partners can get on board, the more likely they are to have ownership for the success of the program, contributing some innovative thinking of their own.

It’s a waste of time and money for everyone when an Innovation Team develops a product that the sales force refuses to sell, or that a manufacturing partner refuses to make. It’s tempting to blame such resistance as “aversion to change” and “closed-mindedness” but the real problem is that the Innovation Team was working in a walled-off garden, and no one benefits when any group is throwing things over walls instead of working collaboratively across fluid boundaries.

Walls Provide Protection at the Cost of Isolation
I understand where this impulse to build walled gardens comes from. Ever since Clayton Christiansen released The Innovator’s Dilemma, corporate R & D groups have been aware that it’s very difficult for innovation programs to maintain their staffing and budgets when they are forced to compete with the current business.

The “business as usual” program will always win.

Breakthrough innovation programs take longer and have a lot more risk. New customers may be hard to find at first. When the product portfolio gets prioritized using financial measures like ROI, the more innovative programs always end up at the bottom, because of how the time value of money calculations work.

The program with the shortest payback gets rewarded, while long term investments suffer.

It’s even worse if an innovation program is truly disruptive, with the potential to cannibalize the existing business. This type of program may even mean short-term losses for the core business. The only way for it to survive is to be separated from its internal competition. Yet if the company’s immune system rejects this type of innovation, some competitors may claim that disruptive territory for itself.

Therefore, corporate R & D programs need targets to ensure that the product development portfolio includes growth projects that carry more risk and have a longer payback. The company needs the flexibility to break out teams with promising ideas that are not sustainable within the current business. The Innovation Teams that seek the next breakthrough need protected budgets and staffing.

The Need for Protection is Real; So is the Need to Avoid Isolation
Where these authors go wrong is that they conflate the need to protect Innovation Programs with the idea of innovation itself. They blame people for “lacking creativity” when they reject ideas instead of the system dynamics that maintain homeostasis in an organization of any size. They discount the benefits of strong cross-functional collaboration that pulls innovation from every part of the organization.

To me, this sends entirely the wrong message about innovation: that breakthroughs come from people with special gifts, and that the rest of the organization should be content to drive the status quo because they lack creativity. Such schemes place more emphasis on hiring the right people, preferably from the outside, and discounting the accomplishments of the people with the most knowledge about the company’s core competencies. This is ironic when you consider that some of the people who get labeled “not innovative enough” under these schemes are the same people who invented the company’s core technologies in the first place.

If you followed their advice, you’d hire a team of people with no connections in the organization, put them in a building by themselves, give them special treatment as “the creatives” and somehow expect them to deliver something that the rest of your organization will embrace with open arms. Is it any wonder that advocates for “skunkworks” programs can point to a few real-world successes?

Innovation is a Company-Wide Responsibility
I believe that every person who touches product development has the ability – and the responsibility – to deliver innovative products to the market. Sometimes, the innovation is highly visible, such as the breakthrough product that allows the company to open up completely new markets. Sometimes, the innovations reside in less visible areas, such as manufacturing process changes that a customer would never see, but that allows the company to deliver breakthroughs in quality, efficiency, and cost. No one is exempt from the need to deliver genuine customer and business value, and no one is allowed to get complacent because innovation is a company-wide responsibility

It’s true that some people feel more comfortable out on the edges of innovation and others prefer to work in an environment where things are more stable and predictable. Some people generate a lot of ideas, and others are better at improving the ideas already on the table. Some see only opportunities and challenges, and others see only risks and problems. Innovation Teams need all of these people, and the more breakthrough an innovation program is, the more it needs this balance to ensure that the team has not gotten carried away on an unsustainable wave of over-optimistic forecasts and technical solutions that violate the laws of physics.

In the product development community, we spent the better part of two decades breaking down the silos between functions. We realized that product development teams got much better results when they collaborated across boundaries. We learned that teams developed much more successful products when they could help each other build a deeper understanding of the problem, and draw upon the organization’s knowledge base to find better solutions. We found that people were full of insights and ideas once they were given the ability to be full partners – not just passive recipients – in the development of new products. We found that no function had a monopoly on creativity and that better products emerged from shared responsibility because innovation is a company-wide responsibility in the imagination age.

No Monopoly on Responsibility
I’m the kind of person who wouldn’t last a day as the manager of a homeless shelter. But that doesn’t mean I can escape the responsibility that I have as a member of my community towards the people living in tents because they can’t find affordable housing. Patience, empathy and healthy detachment are all things I can develop, and the best way to do that is to spend time with the people who have it, and with the people who need it. The volunteers who spent an evening arranging sleeping pads in a church gym on a cold winter night are more likely to support efforts to eliminate the need for such shelters. As they spend time with the people who come in to escape the cold, the shelter workers begin to see that they have things in common with the people who run the shelters – and the people who use them. They’ll find that every tent contains a person with a story and appreciate the strength it takes to survive there.

While not everyone has the talent and experience to guide a breakthrough innovation program from inception to launch, each person has some way to support innovation. A company immune system that encounters innovation regularly from many different places is an immune system that won’t see new ideas as foreign agents to repel. Successful innovation programs are the shared responsibility of every person who touches product development, which is the entire company because innovation is a company-wide responsibility.

ABOUT THE AUTHOR
Katherine Radeka is the founder and executive director of the Rapid Learning Cycles Institute, which supports a growing global community of innovators. Katherine has worked with industry-leading companies including Hewlett-Packard, Whirlpool, Steelcase, Keurig Dr. Pepper, Johnson & Johnson, Sunpower, Kimberly Clark and others in industries ranging from pharma and biotech to metallurgy, green energy, and consumer products. Katherine lives in Camas, Washington. Her other books include the Shingo Research Award-winning book The Mastery of Innovation: A Field Guide to Lean Product Development (2012) and The Shortest Distance Between You and Your New Product: How Innovators Use Rapid Learning Cycles to Get Their Best Ideas to Market Faster (2017). HER NEWEST BOOK IS High-Velocity Innovation: How to Get Your Best Ideas to Market Faster.
Follow Katherine to learn more about how to increase your Innovation Velocity across your organization, and learn more about her work at the Rapid Learning Cycles Institute.