In this first part of this two-article series we will explore why large organisations struggle to innovate long term, and what are the signs you need to be aware of.
Building a Sustainable Culture of Innovation with Operational Design.
Congrats 👏, If you’re reading this then you’re already thinking way ahead of most people in business. You’re a corporate rebel who embraces change and you have a desire to build a future-focused organisation, one that applies not only strategy but cultural and organisational thinking to its ways of working. But don’t stop there and don’t get complacent! Successful business transformation evolution only exists through execution, and one must always practice what they preach.
Newton’s First Law of Motion states that a body at rest will remain at rest and a body in motion at a constant velocity will remain in motion.
The Second states that if an unbalanced force acts on a body, that body will experience acceleration.
You can easily apply these laws to the realm of business and see a direct correlation to those of successful organisations. Businesses, like Netflix and Apple, will apply the first rule, always moving forward, always challenging themselves to be better, always working an infinite game mindset.
Some, like IBM and Microsoft, will employ the second law from time to time needing a strong crank to the flywheel of innovation. To do this, there is no better way than undergoing a design Sprint. Sprints will inject some much need acceleration into your business in just 5 days. But the more important question is; how do you maintain that velocity long term… how do we stay in motion?
In this first part of this two-article series we will explore why large organisations struggle to innovate long term, and what are the signs you need to be aware of. In part two, we will outline how to bring together Design Thinking, Lean Methodologies, and Agile Development to lock-in a culture of continuous learning and improvement.
Why Now is Important
They say that the majority of large organisations only ever look to innovate in times of crisis. Usually when a competitor threatens market share or in times of specific, local or global uncertainties...ring any bells?
At the beginning of 2020, the coronavirus caused nearly every business on the planet to just stop, no notice, no planning, just a complete stop. Although digital transformation has been happening for years, especially in the financial sector, many businesses were under the impression that it wasn't critical for the way their business operates. Now, every business out of necessity is rapidly clambering to become a digital service to survive.
Ok, If every business is now a digital one then it probably means digital transformation is dead right? (Although I would have said this had always been the case but that's for another post.) Digital transformation was never actually the goal, it was only ever the very first step to becoming a future-thinking business.
Becoming a future-thinking business, in theory, is fairly straight forward, it is in the practice and execution where the perils lie. The same mistakes seem to keep cropping up over and over again for large organisations, stopping them from truly applying their innovative thinking. Furthermore, this is why innovation usually gets a bad reputation, a lot of thinking without any doing! It grinds down your people and after a while it becomes extremely frustrating for both leaders and practitioners.
What Stops Innovation
Over Etch's many years of experience, we've noticed a few key areas that continue to suffocate innovation. We can normally tell how innovative an organisation is just by looking at the time they take to respond to change. It takes a huge amount of political capital to change an organisation and the larger the organisation, the more politics, planning, and siloed work seems to exist creating some kind of slow disconnected linear process driven monster. There is a great spin on a Peter Drucker quote and we think it's quite an apt truism;
So, here is what you need to look out for if you're going to successfully build a culture of innovation.
This breaks down into a few facets but ultimately it boils down to the members in your team having access and an understanding of the right tools and methods with enough personal drive to challenge the boundaries.
A misunderstanding of the conceptual delivery model. Maybe it’s Design Thinking, Lean, Agile or a riff on all of the above, at a high level these methods are simple, intuitive and the value they provide seems like a no brainer. In practice, however, they can be hard to follow through on day to day. Given any uncertainty individuals will always do what is comfortable and apply their own ways of working if given the chance. Over-communicate, practice rituals and show examples of the behaviours you need from the team, turn conceptual ways of working to distinct.
Fear of failure. Nobody likes to fail and this makes everyone cautious of commitment, but it’s worth remembering that perfection is the enemy of done. You will never enjoy missing the mark but you will grow a tolerance for it, you just need to keep failing forwards and using it to learn. If done properly small failures along the way can lead to success overall. Treat everything as an experiment. With experiments you set the scenes for understanding, who are the actors, why do we care, what should we discover and how will we measure. As someone in a leadership position, you have to create a protective environment for people to fail and feel comfortable, hell, you might even want to celebrate failure!
Lack of practice. This is a common theme and one that many organisations full victim of. When times get tough and we rely on our second law only (accelerated motion), we tend to assemble new crack teams of experts and ask them to solve our big problems. We don’t know about you, but if someone gave us guitars and asked us to serenade them, they might be in for a bit of a shock...and a slight case of earache. I’m sure we’d be able to make sweet music at some point, but it would take practice and we would need to start small then build up our capabilities. Exactly the same applies in innovation too, no different. Even if you do have subject matter experts It still takes practice for the band to play cool jazz.
Access to the right data. We’ll use “data” as a general term here but this applies to all types of quant and qual. As a logical species, we tend to search for patterns. We’re hungry for big data and we will use it, even if it’s bad. Yup, that’s right. Our desire to apply logic to a nonsensical world means we manipulate the data we can to fit our needs in order to create rationale around events. Examples of this can be seen in; Customer surveys - A great initiative that is often skewed by poorly framed questions, leading customers to answer the question and not respond to the problem. Website analytics - Key to making any enhancements to the online experience, ruined by learning from metrics constrained to the current implementation “our users always visit our faq page, we should optimise this” But is the rest of the service so bad the actual reason that faq page needs to exist at all?
Failing to get the right team together is something we see from time to time but even if you have the right people you have to establish the right behaviours and a healthy dynamic.
R.E.S.P.E.C.T. One of, if not the most important traits a team needs to develop. Teams struggle to perform at all if there is any ounce of distrust. Mutual respect for an individual's contribution, status, and their values within a team is critical to success. Unfortunately, there is no quick solution to this and the more expertise in a room, the more delicate the lines of social empathy become, people like being "The Expert". Bruce Tuckman developed a theory on team development called forming, storming, norming and performing. This theory is mostly true of all newly formed teams and only once each team member has established their position within the tribe can teams begin to perform.
Part-time commitment. A simple one but often seen holding back teams and creating friction. Not dedicating enough time for the challenge to be your main focus. This will always lead to some level of prioritisation for the individual, and that prioritisation will also put short term fixes over long term preventative measures.
Considered meaningless in the grand scheme of things but when a misunderstanding of semantics is multiplied by the network effect it leads to great confusion and frustration. For example, the phrase "prototype" will mean something completely different to designers, engineers, scientists, and entrepreneurs. Forget specialisms and establish a jargon buster board or a commonality of language within the business teams early on.
As mentioned before, creating a culture of innovation takes huge political capital. This is the number one reason why organisations struggle to stay in motion. As much as leadership likes to think that politics do not play a part in business decisions the matter of the fact is that they do. Organisational politics are invisible but they influence every person and decision within a business and its infrastructure.
No Influence or Authority. For a team to navigate the deep waters of office politics and be free to innovate, they need the buy-in from some of the most senior people within the organisation. Change, signals threat to many, and those that fear change will push against the new or slightly left-field ideas. These naysayers will find ways to kill innovation whether they mean to or not. Be conscious of who leads your innovation and consider these three facets, you're looking for people with pull behaviours rather than push. Strategy Aligned - Alignment with business objectives will always be important but beyond this alignment with key stakeholders on a personal level will be more fruitful. Culturally Minded - Not being aware or empathetic to the company culture will cause a spread of disbelief. Keep true to the organisational values and solve problems for the infinite game. History of Success - Start small and build a reputation if it doesn't exist, not having a proven track record always begs the question of lack of experience and evidence, build social proof!
Solutionising for the room. It is common for in-house teams to look at problems and solutions from the lens of its existing culture. They do this not only to lack of exposure but because they want the solution to be appreciated by their peers within the room. This inability to think outside of the culture box leads to a narrow view of the art of what if.
How To Move Forward
Check back next week for part two where we will outline how to bring together Design Thinking, Lean Methodologies, and Agile Development to lock-in a culture of innovation through continuous learning and improvement.