Innovation Undressed

Decoding Innovation at Karen Millen

For the last two years we’ve had behind-the-scenes access to one of the world’s most innovative fashion houses: Karen Millen.

Our aim? To decode the innovation formula that has catapulted the brand from being $100 startup to a $400m global business.

This is our story of the culture, tools, hacks and leadership that’s driving disruptive innovation in one of the world’s fastest moving creative industries.

Read the story.

How the world’s biggest gaming company teaches Executive Storytelling

Last month I got to spend a week in Hollywood with gaming giant Electronic Arts (Fifa, Sims, Battlefield etc.).  The assignment?  To co-design and facilitate a disruptive leadership experience with Chris Parles and help 30 leaders make breakthroughs in their storytelling ability.  Awesome.

This video is a 3 minute sprint through what happened when EA leaders were let loose in downtown LA and made to work with Hollywood directors, rock bands, storytelling gurus and innovation experts.  Andy Billings, EA’s VP of Profitable Creativity sets the scene for us.

If you’d like to run something similar inside your organisation, let me know at: ideas@dpacoms.com

Innovation’s Executive Trust Trap

In the March edition of the Harvard Business Review, David DeSteno gives some useful advice to help increase the level of trust inside organisations (summary at the end of this blog).

I’m currently working with a guerilla negotiator to help a major record label untangle the trust issue.  Why?  Because trust and innovation performance are dynamically related, and the music industry needs innovation.

Managers who don’t trust their teams don’t encourage innovation for risk of ‘screw-ups’.  Employees who don’t trust their managers aren’t motivated to take risks for fear of screw-up repercussions.

Capability and character are two useful lenses to consider why trust is lacking; but often the deeper root issue is a culture of fear within the organisation that few executives are ever happy to acknowledge.  The idea seems ludicrous to them.

Yet a senior manager in one of the world’s biggest cell phone companies recently told me that despite an outward reputation for innovation, employees are petrified to take the smallest of risks. “It’s hard enough to survive here, let alone try something new,” he told me. There’s even widespread anxiety about talking to customers for fear of hearing something that would contradict management’s vision of success.

So why the guerilla negotiator?  It’s part of a wider program to build leadership innovation capability in multiple dimensions, but the negotiator is an expert trust builder amidst conditions of extreme uncertainty and ambiguity.  Something that most executives are becoming increasingly familiar with.

Finally, here are David DeSteno’s proposed tips from the Harvard Business Review article to prompt trustworthiness in new or potential partners’ behavior:

• Be generous. Feelings of gratitude foster trustworthy behavior. 
Giving new partners a reason to feel grateful to you is a win-win: They benefit in the short term from your generosity, and you reap the rewards of their loyalty.
• Find commonality. Emphasizing common ground increases the likelihood that your counterpart will see you as someone with whom it’s possible to build a lasting and beneficial relationship.
• Don’t punish. Threats of punishment can prevent untrustworthy behavior in the moment but can be counterproductive in the long term: new partners may be less likely to take risks to support one another.

4 Factors to Stop Leaders Flirting With Innovation

FutureBook recently asked me to write an article about how to create a culture of disruptive innovation in a fragmenting industry.  In it I outline four crucial factors that leaders must confront if they genuinely want to see innovation breaking out across their organisations.

What other ideas would you add?

Fifty Shades of Innovation

Rita McGrath On The End of Competitive Advantage

Last night, DPA hosted a dinner with the brilliant Professor Rita McGrath. This short video outlines some of her key ideas around the end of competitive advantage.

The 7 stages of employee engagement

Ask someone to get involved in a new project and you’ll provoke one of seven likely responses:

Use this tongue-in-cheek graphic from dpa to plot your team and ask the questions:

1) Why have I put them there?

2) Would they agree with where I have placed them?

3) What would it take to move them to the right?

Of course a great first step is always to start with yourself!

What’s the point of creativity?

Dan Pallotta asks this question on Harvard’s blog today (http://bit.ly/1fUVlo4).  And he’s right to ask it.

DPA describes innovation as “the marriage of creativity and pragmatism.” While a recent IBM study showed that creativity is the No.1 CEO desired trait in corporate talent, the reality is that most boardrooms are stocked with pragmatists who are incentivised to defend the status quo, and so find it hard to embrace creativity.

Or do they?

Our experience is that executives actually love creativity. But only if the context is right.

Ask a team to find a great new way to cut costs around an initiative that supports today’s business model (often in response to a crisis), and you’ll see a degree of creativity emerging and solutions that get an enthusiastic thumbs up in the boardroom.

Ask a team to find a great new way to reinvent the way we make most of our money (because the competition will anyway, eventually), and the boardroom radio station soon gets re-tuned.

Creativity will always be valued according the context in which it’s applied. When it’s set inside a robust innovation strategy – http://bit.ly/16ZFhQP – and backed by an executive team that is genuinely intentional about creating new value, it stands most chance of success.

The focus that turns innovation from gurgle to Google

“Just How Valuable Is Google’s 20% Time?” asks Michael Schrage on the Harvard Business Review blog.

Whether 20% time is right or wrong, the core issue around disruptive innovation is to actually give it attention.  Most companies don’t.  Day-to-day survival mode usually elbows aside time for strategic thinking about the future, and yet many executives either assume or hope that big ideas will just emerge regardless.

Innovation needs intentional focus – whether that’s a set of strategic questions that every employee is continually trying to solve; or a workplace that is strategically designed to encourage serendipitous innovation collisions; or a chunk of time that you get to play with as you wish…whatever approaches you want to take, you need to do something deliberate to pull more of tomorrow into today.

How much does your innovation weigh?

Four quotes from an innovation powerhouse reveal a lot about why so many companies find innovation difficult.

“We do pay-as-you-go innovation around here.” Not what I expected to hear from a senior executive inside one of Forbes Magazine’s most innovative organisations.  “We innovate when one of two things happen: either there’s a crisis or we need to launch a product,” he added, to emphasise the point.

What he meant was that the company lacked a strategic, holistic approach to innovation.  Not exactly making it up as they went along, but not far from it.

An hour later I’m with some managers in the company’s IT department.  “Most of our innovation is creating workarounds to make someone else’s half-baked idea actually work,” they tell me.

The day ends with a group of sales managers and we finally get to the core issue: “Thinking about the future is a luxury here,” I’m told with a regretful tone.

Innovation Groundhog Day?

Maybe I chose a bad day to start this particular innovation assessment; but in reality, the same underlying attitudes about innovation prevail in most companies. The short-term focused “pay-as-you-go” approach creates temporary spikes in performance for some parts of the company, but they are often accompanied by costs elsewhere, notably:

• Short-lived returns – Reactive innovation tends to yield only short-term, tactical advantages that are easily copied by competitors.  There’s always a place for this approach as part of a broader innovation strategy, but if all of your innovation falls into this category you risk being terminally locked into industry dogfights or eventually answering the door to the corporate grim reaper.

• Blander, slower innovation – Left to its own devices, innovation inevitably happens at the point of greatest immediate need.  Usually, that means it emerges at a team or divisional level, and often without adequately including the stakeholders who will help implement and improve the idea.  As the weary IT managers told me, the outcome is often a series of workarounds that ultimately slow down execution.

What’s happening is an innovation disconnect on a huge scale: innovation driven by the short-term needs of individual functions, but disconnected from the wider stakeholders and long-term strategy of the rest of the organisation.

 Innovating Innovation

So what’s the alternative? “Get joined up and get strategic”, is the clear message from two recent reports by Accenture and Cap Gemini.  Performance sky-rockets when organisations think holistically about innovation, they conclude.

That’s all very well but where do you start?  We encourage organisations to be intentional about four essential parts of an effective innovation ecosystem:

1. Creating strategic focus: Great innovators make great questions the focus of their corporate innovation.  The creative freedom to explore a constrained question is the nitro and glycerin of the front-end of the innovation process.  In the last 12-18 months, designing what we call “brilliant questions” has become one of DPA’s most sought after services.
2. Discovery-led innovation tools: 90% of product launches fail, often because they are based on faulty initial assumptions about the customer.  Giving employees tools that help them discover deep customer insights, develop ideas with strong competitive advantage and then run low-cost experiments to test underlying assumptions, are essential ingredients to high-performing innovation.  The tools at the heart of Lean Start Up, Blue Ocean Strategy and Business Model Generation are transforming performance inside many of the organisations that we work with.
3.  Culture and Climate: Peter Drucker famously said that culture eats strategy for breakfast, a perspective ultimately proven to be true by a great deal of research.  A culture that supports innovation needs leaders who value things that have been gagged and bound in the basement of most companies: embracing uncertainty and ambiguity; making decisions with much less than 100% of information; encouraging risk-taking; making space for great ideas that have no natural home in the current structure; and learning from failure.  Business model issues aside, leadership development programmes must start to devote more than a one-hour slot to these crucial innovation performance drivers.
4.  Fuel: Beyond ideas and processes, innovation needs fuel.  It comes in many forms not least dedicated time, employee motivation, cross functional collaboration, engineered serendipity (80% of ideas happen outside meetings) and leadership sponsors. Oh, and budgets.  They’re all essential in oiling the wheels of innovation from the initial creative spark through to pushing past the final bits of red tape that are still trying to kill the idea before it launches.

 Expedient vs Heavy Innovation

Sometimes ‘fixing innovation’ can seem too complex and difficult to contemplate.  The good news is that any leader or manager who chooses to become more intentional about innovation can pursue a long-term strategy of incremental improvements in these four areas that ultimately deliver compelling competitive advantage.

If that’s you, Amazon CEO Jeff Bezos has a mantra that’s worth pinning up in your office.  Quoting economist Benjamin Graham in a recent interview with Harvard Business Review, Bezos said, “In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine. And we try to build a company that wants to be weighed and not voted upon.”

How heavy is the innovation strategy in your organisation?

This article is also published on the DPA blog: http://bit.ly/16ZFhQP

De-risking Innovation the Smart Way

If there’s one thing guaranteed to lighten the pallor of an executive’s face, it’s the suggestion of taking more risk.

Need more breakthrough innovation? Sure. What’s the catch? The clue is in the adjective: breakthrough innovation requires a degree of breakage en-route. That means taking risks that don’t always pay off.

It stands to reason: in a turbulent, uncertain and complex economic climate there are few ‘knowns’. New product development in particular has become a voyage into the unknown with companies using intelligent trial and error techniques such as Lean Start Up.

But in most cases, the perceived negative implications of a risk-gone-wrong stifles the very innovation that organisations so desperately need.

That makes Doug Sundheim’s Taking Smart Risks: How Sharp Leaders Win When Stakes Are High a timely and welcome guide for organisations that want to do just what the title says.

Five steps to smarter risk-taking

Doug gave me a sneak preview of the book before Christmas and I found it to be a rare and accessible blend of research, insight, wisdom and practical tools that deserves a place in every executive briefcase.

Taking Smart Risks offers readers five smooth stones to slay the ‘fear-giants’ that crush smart risk-taking in their organisations:

1. Find Something Worth Fighting For

• Something Worth Fighting For (SWFF) is what all smart risks have in common.
• It must be simple, stir emotion, lend itself to a story or narrative and inspire action.

2. See the Future Now

• Ask questions, understand concerns, test the concept behind your ideas, and predict as many fail points in advance as you can.
• Have an open, honest conversation with trusted people around you to determine what is the worst that could really happen.
  

  Doug Sundheim

3. Act Fast, Learn Fast

• Start before you know where to start, fail early, often, and smart – build learning into everything and stay humble.
• Accept that you have to live with failure – since it is an inevitable by-product of taking risks, even smart risks. Failing smart is the best way to learn.

4. Communicate Powerfully

• Expect communication to breakdown and plan accordingly.
• Share thought processes, meet regularly, and don’t avoid difficult conversations.

5. Create a Smart Risk Culture

• Define a smart failure – the acceptable boundaries within which it is okay to fail.
• Reward both the successes and these smart failures.

Every chapter ends with a clutch of useful tools to help readers de-risk risk-taking. If you’re short on time, just read the handy chapter summaries and start playing with the techniques that Sundheim suggests.

If you’re serious about innovation, growth or even plain survival, risk-taking is non-negotiable. Sundheim’s book doesn’t guarantee a failure-free future (what a relief as so much crucial learning happens when we fail!), but it will help leaders and managers in every organisation improve the quality of their risk taking.

The hardcover and Kindle versions of Taking Smart Risks: How Sharp Leaders Win When Stakes Are High are out now.