The Four Principles of Corporate Innovation

Board directors face a stark choice: Develop a viable approach to innovation at their organization or face a slow and agonizing descent to irrelevance.

Prioritize problems over technologies.

Many of our customers start “innovating” by purchasing a few early-stage technology products (a flashy machine learning product, for example), but then fail to make progress. The disappointing results force them to look for another way. This is often when they find us, and learn to focus first on problems. Every problem facing an organization’s business or operating unit is the functional equivalent of pain. “Innovators” need to pay special attention to these pain points. They should dive deep into the nature of each problem to understand the reality of the team that is doing work with actual customers. Survey other people in similar roles to see how widespread the problem is, how severe it is, when it occurs, what triggers it, how it affects others and what’s required to overcome it. This data is surprisingly easy to collect, and will help assess the overall health and functioning of the organization.

Recruit the doers in your organization.

Solving problems is hard, often thankless work. It involves working after hours, taking risks, and facing rejection constantly. Most people in a large organization are not suitable candidates for such work. A corporate board cannot simply designate someone as the lead for an innovation project, either. The required mindset and behaviors must be consistently exhibited first. We’ve seen motivated “problem owners” make months—even years—worth of progress in a matter of weeks, developing and testing prototypes internally that promise improvements of 5X or more compared to current processes. So be on the lookout for the risk-tolerant, get-stuff-done types. These are the people who constantly grate against middle managers. They push through their projects regardless of the obstacles in their way. Harnessing them is the only way to reconnect a large organization’s “body” to the “brain.”

Quantity first, then seek out the quality.

Though the “body” of a large organization can experience lots of pain in the form of recurring organizational problems, its “brain” often fails to process these negative sensations. Board leaders can get insulated by layers of bureaucracy that—understandably—try to filter out certain types of information, especially bad news. This happens in governments, nonprofits, universities, and big companies. Leaders need to re-establish a connection to the organization’s problems by building a community of doers. Host a one-day summit or workshop to get them all in the same room kicking around ideas and finding ways to support each other. Such events force the executive team to pay attention to the talent they already possess. Though the initial temptation is to shy away from the influx of ideas from this crowd, corporate leaders need to lean into them, instead. The solution to a flood of problems is to prioritize them in a smart way. Adopt rigorous screening methods to sort out the truly meaningful problems from complaints and infighting. Organizational adaptation requires energy, so only the most pressing problems should be tackled.

Stay away from headquarters.

All real work is done by the body, not the brain. As the saying goes, it’s 1% inspiration and 99% perspiration. The primary role of leadership is enabling others by directing resources and updating policies, not coming up with more ideas. Overly engineered solutions built at headquarters won’t survive the rigors of an operational environment. Let your crowd of doers work on their own problems. As these operational teams develop viable solutions, boards and corporate leaders should resist the temptation to move the teams away from their workspace. This well-meaning strategy will rob the doers of much-needed feedback as they develop and validate solutions.

Read more: Inside The Innovation Stack


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