An innovation culture?

Chris Simcoe, says, in a comment on my last post (I was remarking on the role of labs in banks):

Could one not ask the same question of institutions which have “innovation” groups or departments and why innovation is just not part of doing business. Is it not something that should be part of the day to day business? If you make innovation someone’s specific job then it becomes someone else’s job.

This is an especially insightful remark, and one that brings up the thorny question of whether what one wants is an innovation group or an innovation culture. In an ideal world, of course, the latter is preferred. But is it realistic, and more particularly, is it predictable?

When innovation is someone’s specific job, you at least have someone thinking about innovation. The converse, that it is no one’s job, leaves things pretty much to chance. You might be lucky enough to get a highly motivated employee who pushes something through, but not everyone is going to be a superstar. Remember, these are people with day jobs who must go above and beyond to get the new stuff done.

When people state they have an “innovation culture” I always wonder if what they have is a well tuned ideation culture. Ideas are fun to dream up, but pretty valueless without some execution. Almost never do people complain about a lack of ideas, yet they do complain that they have too little innovation. What do they imagine is missing?

In my discussions with other bank which have structured ideas management programmes (as we do), one thing is clear. If idea velocity were the measure of innovativeness, we’d all be working in the most innovative industry in the world. That, unfortunately, is not the perception most people have of us.

The art of innovation is being able to take an idea and turn into something. Not everyone has those skills, even if they did have the time above their day jobs.

Turning ideas into reality involves politics, it involves sales, it needs technical know-how, and it needs a certain degree of credibility internally. it also takes a lot of time. That’s why having an innovation team that can provide part of the execution helps to get things predictable.

Predictability, by the way, is the hallmark of a successful innovation function, whether it be a distributed culture, or a central team. Here’s the real question: is it better to have the potential of huge innovation volume but no certainty that anything will happen (the culture approach) or much reduced levels of activity but certainty that there will be outcomes (the innovation team approach)?

I’d be betting most institutions would take the latter.

4 Responses to“An innovation culture?”

  1. June 25, 2008 at 1:07 pm #

    If we look at the way innovations are grown and financed on the market, it is apparent that the consumer is not financing directly innovations and that there are indeed multiple stages in the innovation process with different types of investors at each stage.
    Organizations are probably not totally different in the sense that the potential user of an innovation is probably not always in a position to absorb all kind of new ideas and turn them into an innovation. We probably need a process where different types of resource allocators act on different stages of the refinement/absorption process.
    Which leads to a sequel question: How can we make innovation departments sell their ideas internally and show a return on the resources they have consumed?

  2. Ben
    June 25, 2008 at 9:41 pm #

    I’d suggest that it is optimal to have both an innovation culture, and an innovation department.
    As you mention, when innovation is everyone’s job, it is no one’s job, and just a few highly motivated individuals will actually act on their ideas and push them through. But what if everyone can take their idea to someone who will research it, qualify it and act on it? And even more important, get recognition for bringing a valuable idea up, maybe even being involved in the process as a 10% portion of their ‘day job’?
    As a leader in an innovation group, this is the approach we’ve taken recently, and it has begun to result in some valuable ideas bubbling up. People have a target to send ideas to when they don’t have the time, skills, connections or energy to see it through. Anyone, from sales to operations to marketing, can bring ideas to anyone in the innovation group and we work together to decide if we should invest in the idea.
    We’re still working on an innovation culture, and there are plenty of people who don’t care to have crazy ideas, but that’s OK, we’re getting plenty of ideas from the folks who are thinking about innovation.

  3. Andrew
    June 26, 2008 at 11:06 am #

    Following on from Ben’s comments, within a true innovation culture shouldn’t employees have innovation goals as part of their annual scorecard? Agreed that ideally you need a team with the focus to help execute on those ideas generated.
    As a Product Manager in a bank not unfamilar to you James, my targets have very little about them that’s innovative!

  4. June 26, 2008 at 2:24 pm #

    The concept of an innovation committee/department/working-group does seem a little counter intuitive to me. Like ‘People’s Democracy” 🙂 But for a company of 1000s of people, to not spare a dozen or so to look into “cool/useful stuff we can do in a few years” would be even stranger.
    I’ve always liked Tom DeMarco’s idea of slack being the main enabler of innovation. People being completely occupied with their day to day jobs, is the problem with innovation in a large company. Functional groups in an organisation should take responsibility for moving their own business areas forwards. Ideas are an abstract concept. It feels dangerous to build structures around processing them.
    If a bank was to open a WAP interface, then that decision ought to come from their website team. This is where the required knowledge and understanding would be. For that to happen, they would need to be able to spend 20-30% of their time building and planning forwards.
    That having been said. A firm which organised itself this way would benefit from a shared pool of market and tech researchers… I suppose it’s all a matter of labels!

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