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September 29, 2005
Operationalizing Innovation--THE hot topic
Just talked to a tired Jeneanne Rae who finished her Peer Insight service innovation conference. Starwood, York International, Service Masters, Siemens and other service companies were there. This is what she had to say: "People are now familiar with concepts. They understand the need for innovation. They know why prototyping is important. They get what constitutes design. The real discussion at the meeting was about something else--how to operationalize innovation. All roads of discussion led back to that place. How do you make your company into a systemic innovator? There is no common denominator out there, no shared understanding on how to do that."
This is precisely what General Electric, Procter & Gamble and hundreds of other companies are struggling to do today. Operationalizing innovation is the central issue in the business world, and service companies industries as a group appear to other industries. And the trouble starts at the top. According to Rae "leadership is engaged to the point where they say they want it, but disengaged to the point where they provide the resources to get it. It's hard to get $20,000 for a study. The leadership doesn't get it enough to enable it, to make it go. There are incredibly talented, courageous people who beat their heads up against the wall because they can't get the resources they need."
So many CEOs and top execs appear to be only talking the talk but not walking the talk. They do the blah blah about innovation but don't provide the juice--or leadership--to make it happen. This is fascinating, important and revealing. It explains a lot. Check out this interesting piece on innovation process that involves IDEO in CMO magazine on innovation. It starts with "Innovation may look casual. But behind every creative leap, there's a real process at work." Build it and new products will come.
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Is this really so surprising?
I recall an article in Metropolis years ago about Patagonia's move to build a corporate office that reflected their internal culture. However, if I recall correctly, they started off doing all the same things most companies do: they began building a wasteful, indulgent space to house their collective ego. To Patagonia's credit, they realized this and did an about-face... with wonderful results.
During tours, corporate officers from other companies were duly impressed with the new digs. The energy efficiency, the intelligent and sensitive use of materials, and most especially the returns on investment were all extremely attractive. That is until the timeline entered the picture. When asked when Patagonia would reach break even, one individual reportedly balked; it was a couple years too many.
Let's face it, the problem - at it's core - is the unwillingness for too many people in positions that matter to consider long-term issues because it conflicts with their personal interests. I've seen too many managers make decisions that pad their resume with short-term product category numbers and ignore the often bleak 5- or 7-year timeline (heaven forbid they should think generationally). But many don't care because in three years they'll be out the door to another company; jumping from lillypad to lillypad as a means to move up the corporate ladder. As easily as corporations now lay off workers and cut their benefits, employees have learned to discard any sense of loyalty in return. Why shouldn't they think of themselves first? Why support investing in relatively risky innovation when the returns are not immediate and not to their individual benefit? There is no compelling reason to do so for many of them.
There are deeper cultural issues at play here, and as such I sincerely and sadly doubt we're likely to see any conference roundtables resolve this dilemma.
Posted by: csven at September 29, 2005 04:30 PM
I think you've hit the nail on the head, but the problem is more systemic than what you articulate, here's a quote from Charles Krietzberg, founding editor of User Experience magazine, from a comment he posted on http://sizematter.blogspot.com,
Some years ago, I was asked by a large corporation to help them make their software products more user-friendly and with a common look and feel. I found that I was being supported by the employees and the senior executives of the company but the middle managers (mainly project leaders) were sabotaging the effort. One honest middle manager told me: "I get assessed whether I come in on time and budget. I know that the product we are delivering is not especially usable but I have no incentive to make it better. By the time anyone decides there is a problem I'll have declared victory and gone on to the next project."
Posted by: Niti Bhan at September 29, 2005 05:51 PM
Your post is the best I've read all month.
Not sure what to do about it though.
Posted by: Paul Hannay at September 30, 2005 06:24 PM