It’s not companies that innovate, it’s the people in them

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When innovation has power and legitimacy, it is easier for innovation teams to build collaborative relationships with their colleagues in the core business, says Tendayi Viki

Originally published 9 April 2021.

The emergence and rapid deployment of vaccines have brought hope for a possible path out of the global Covid-19 pandemic. During this crisis, the focus of most companies has been on ensuring survival. However, as the world starts to open up, company attention will start to turn to growth. A big part of creating company growth is innovation. The development of new value propositions and business models is often the best path towards long-term sustainable company growth.

As much as we refer to companies, and even rank them when we talk about innovation, it is not companies that innovate, it is the people in them. I have spent part of my career developing tools for innovation and helping companies put them in place. What I have learned is that simply having the right tools is not enough. Even the best tools in the world cannot innovate by themselves. It is people, using their skills and motivation, that leverage those tools to innovate. This is why at its very core, innovation is a sociological challenge.

Building skills

In some of my conversations with leaders, they have agreed with me that having the right tools is not enough. What they want is training for their people. Their argument is that having a great tool such as the Business Model Canvas, is not the same thing as knowing how to use it well. This is a hard proposition to argue against. At one level, leaders who advocate for innovation training are right, but at another level they are wrong. Let’s start with how they are right. 

Most people that work in established companies have spent their career developing the skills necessary to execute on their company’s existing business model. These skills are often highly valued and rewarded within the company. Given the benefits they create for their careers, these execution skills have become a routinised habit for the individual. It is effectively their go-to-move whenever they are facing a business challenge. 

The problem is that execution skills are not that useful when it comes to innovation. This is because innovation is an exploration challenge. Unlike working in an existing business, most innovation teams are dealing with some level of uncertainty. Their job is to search and find value propositions that resonate with customers and profitable business models that can scale. These entrepreneurial skills are new to most people and have to be learned. This is the value of innovation training programs.

I have worked with several companies to develop training programs in order to teach a chosen group of employees how to use the right tools to innovate. I have even been part of long-term programs to train a group of innovation catalysts, whose job after the training is to coach internal innovation teams while they do their work. These programs are good in that they not only build innovation skills, they can also generate enthusiasm and excitement around innovation within the company.

While innovation training can create some positive outcomes, the challenge lies in the leadership belief that simply training people to use the right tools is enough to get innovation going within the company. This is where leaders can be wrong. In 2015, I was part of a team that led a training program at a global publishing company. After the program, one enthusiastic employee decided to implement what he had learned on a project he was currently working on (i.e. testing the idea before scaling it). This poor guy faced so much resistance from his line manager that he eventually gave up and left the company. 

From this experience, I learned that innovation training only does half the job. In some situations, innovation training can actually be harmful. This is because it creates a sense of hopeful aspiration among employees, only for that aspiration to be dashed when they are back at work with their managers. As such, when we say that it is the people within  a company that innovate, this also refers to the relationships and power dynamics among those people. Beyond training people, we need to be thinking about two other things; leadership support and organisational design. 

Leadership support

There are two main mistakes leaders make that can stifle innovation. The first mistake is that leaders tend to focus predominantly on running the core business and ensuring they meet their quarterly results. Management thinker Alex Osterwalder runs a survey during his workshops where he asks people what percentage of time leadership in their companies spend on innovation. More than 60% of the respondents always indicate that their leaders spend less than 10% of their time on innovation. This lack of focus is an indicator to the rest of the company that innovation is not a priority.

The second mistake is that, when leaders do pay attention, they use the wrong management techniques to drive innovation. Asking for long business cases and measuring success using financial metrics too early can stifle innovation. Leaders need to understand that when it comes to innovation, they cannot pick the winning ideas on day one. Instead, what they can do is provide clear strategic guidance, give teams the time and resources to test various ideas and periodically review the progress those teams are making towards finding something that works.

Beyond training, leadership support provides a key signal that innovation is a priority within the organisation. When leaders work to actively remove the obstacles that block the path of innovators, this can be even more helpful. However, senior leaders can only do so much. It is also important to recognise that our organisational design impacts the relationships and power dynamics between innovation teams and the rest of the company.

Organisational design

The primary issue of organisational design concerns the level at which innovation sits on the company’s organisational chart. I have worked with several Heads of Innovation, whose title makes it sound like they have more power than they actually have. It is not rare to find that the Head of Innovation reports to a Senior Vice President, who in turn reports to a C-level executive that then reports to the CEO. This means that the highest level of power that innovation has within the company is three levels below the CEO.

When Heads of Innovation have limited power and legitimacy within the company, this limits their ability to remove obstacles or access key resources. The sociological dynamics that are triggered in his situation results in innovation teams constantly having to justify their right to exist. This is not a challenge finance or HR teams face, because their roles are acknowledged as important and their leaders appear at the highest levels within the company. The solution to this problem is to give innovation a similar position at the C-Level and a clear career path for innovators to follow.

When innovation has power and legitimacy, it is easier for innovation teams to build collaborative relationships with their colleagues in the core business. These relationships are important because very few innovations can successfully scale in the market without the support of colleagues from other parts of the company such as legal, compliance, finance, sales and marketing. The nature of these collaborations and the extent to which they are encouraged within the company can mean the success or failure of innovation projects.

Innovation = sociology

Innovation succeeds to the extent that people in the company have the right skills and are provided with the right environment within which to work. Innovation needs to have leadership support, power and legitimacy. This is why at its very core innovation is still a sociological challenge.

Tendayi Viki is Associate Partner at Strategyzer, an author and corporate innovation expert. He has written three books: Pirates In The Navy, The Corporate Startup and The Lean Product Lifecycle. Tendayi was shortlisted for the Thinkers50 Innovation Award and named on the Thinkers50 2018 Radar List of emerging management thinkers.

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