Here at Spigit, our company is run on a quarterly sales cycle, as are most American-headquartered organisations. The quarterly cycle causes us some disconnects here in Europe where things don’t run in quite the same sort of way, but they do create urgency and an imperative to deliver results.
This morning, as I was having my usual stress (more of a heart murmur than an attack) about whether we were going to make our numbers by the end of the quarter, I realised something.
I have never seen an innovation programme or an innovation team that has much of an of urgency mechanism.
I have never seen one that’s had to meet quarterly revenue targets. There is hardly ever a requirement to manage a pipeline of new things to completion in order to meet a number. I’ve not seen much of any dynamic at all that makes sure that innovators are delivering results early and often to the numbers.
The innovation programmes I’ve been responsible for have never had that kind of urgency. Oh, we had to deliver, but to a hard financial number every quarter? I think not.
We got away with it because we managed to delude people into thinking that softer metrics – like number of ideas we’d collected – were a reasonable proxy for progress.
As you know, I’m one of the people who think the only innovation that matters – as in really matters to business people against whom innovators have to compete for resources – is the kind that makes money or takes out cost. The other stuff is all a nice to have once the money is coming in.
So it strikes me as odd that I’ve never noticed the lack of urgency mechanisms before this. It is something of a revelation.
I know this thought must, by now, be driving some readers here mad.
“You can’t get innovation by the numbers!”, I know one ex-colleague of mine will be thinking, as they rant about how mechanical I want their creative process to be.
There’s another – whose name I dare not mention – who will argue that innovation is an overhead cost of the business which must just be carried by everyone else. “Innovation is everyone’s job”, he would say, implying that it cannot, therefore, be a formal line in anyone’s accountabilities.
Why is it innovators think they can get away with not delivering revenue by the numbers when other business disciplines have no such luxury?
When I was writing Innovation and the Future Proof Bank, I noticed most bank innovation programmes were cancelled after about 18 months. Their corporate sponsor moved on, and lacking any reasonable justification for existence in their own right, they had their resources pulled. They simply weren’t operating as businesses that deserved to stick around: they were the guarded special interest of someone powerful.
I think it reasonable and right that innovation teams be assigned hard financial metrics against which their performance can be judged. I think, furthermore, they should be compensated in the same way as their sales colleagues. Yes, I do mean a commission plan against what they achieve in terms of hard numbers with a weighting towards variable rather than fixed compension.
Innovators are salespeople. They are the ones that have to get their organsiations to adopt and implement new things (how is that different from a typical vendor salesperson, anyway?). Salespeople have to manage a pipeline and deliver hard benefits.
Once, when I inherited an innovation team from someone else, all the innovators found other jobs when I asked them to act more like salespeople than inventors. They didn’t like it one bit.
I can’t imagine the reaction I’d have gotten if I’d tried to put in quarterly numbers and held them to account. But now I think about it, I would likely have had much more success in that job if I’d done it.
I didn’t have the correct urgency mechanic to ensure I was getting financial results, then. I know better now.
What do you think? Can innovation really be treated as a business process that can stand up and be counted? Or are we always destined to be poor cousins to real business, scrounging for resources and begging for senior attention?