33 Powerful Principles For Leading Successful Innovation In Corporates & Multinationals
Innovation leadership within large organizations is notoriously hard. In this article, benefit from the hard-won lessons we have learned over the last 25 years as we have pioneered breakthrough innovation corporations. Leverage these 33 principles, hacks, and strategies that are proven to break through organizational immune systems and their tendency to kill innovation to empower, enable, and elevate innovation teams to unlock big, bold, and beautiful ideas that forge the future of your industry.
- 5 Ways Corporate Innovation Leadership Activities Are Likely To Fail
- The Ultimate List Of Innovation Mistakes, Failures & Killers
- 33 Powerful Principles For Leading Successful Innovation In Corporates & Multinationals
How To Succeed At Leading Breakthrough/Disruptive Innovation In Corporates
For a start, learn to recognize the killers and blockers I listed in the previous article. Spot them in yourself, step back, and see the big picture. Pause and reflect before taking further action. Challenge those caught up in them with compassion and elegance while being responsible for your complicity in them. Commit to doing actual transformational leadership development and transform old beliefs and behaviors to stop killing innovation.
Above all, realize that innovation and innovation leadership are anything but easy. They may be the most challenging task a leader will ever take on.
Yet given the fast-changing nature of all markets and industries, a leader will likely need to drive forward, inspire, and lead not just one breakthrough innovation in their careers but scores if they want to stay ahead, stay relevant, and stay part of the future. So it is worth getting seasoned in this area of work as soon as possible.
Learning, growing, and developing as an innovation leader is increasingly crucial for all execs. The companies that get this kind of customer-centric and creative way of solving problems right are those that top the Fortune 500. As Steve Denning states: “The most valuable and the fastest growing firms today are being managed very differently from average-performing firms.”
A few ideation workshops and post-it notes are insufficient to drive innovation. Neither is process engineering or de-risking it to death so that endless gates, codes, rules, and stages kill the excitement, passion, and energy.
What leaders need is to realize that innovation requires a set of principles, attitudes, and behaviors that are quite distinct from the management theories and best practices from the 20th Century:
Getting Innovation Right: Principles, Mindsets & Best Practices That Work
- Disruption readiness: embrace the reality that in this era of rapid change, all products, services, business models, processes, and operating models are ripe for disruption by more agile and innovative competitors and by the changing needs, wants, and desires of growing customer segments—so aim to disrupt yourself first in the safety of a contained innovation process before it happens for real by an (often out-of-industry) competitor and remember that past might doe not guarantee future fit and what got you here may not get you to there
- Change and complexity awareness: be awake and alert to customer-driven (and employee-driven) changes that the company metabolizes into new value-creating products, services, processes, and business models to avoid the commodification and obsolescence of existing propositions—and embrace the harsh reality that senior executives need to constantly engage in sense-making activities to make sense of rising complexity and cope with enormous uncertainty (requiring what innovators call “negative capability“) to have the clarity, coherence, and creativity needed to lead innovation and transformation (and customers, investors, and employees aren’t going to do it for them)
- Multi-horizon thinking: while quarterly reporting cycles will continue, senior executives need to lead their shareholders and other stakeholders through influence and narrative to see the essential need for strategic innovation over at least three horizons—1/2 years, 3-5 years, 5-10 years (and in our programs, if we define the problems effectively ideas to solve them across all horizons reliably emerge, which build together towards business transformation that forges the futures of the industry—and be ready for dips in share price if Wall Street cannot fathom the need to invest in tomorrow as well as exploit today
- Intrapreneurship positive: galvanize and marshall the energy and creativity of budding/latent innovation leaders (especially challengers and mavericks) by empowering them with a mandate and budget to get to work—and giving them time, space, and permission to innovate—while giving them clear guardrails that focus their brilliance onto specific opportunities while protecting the rest of the business from the necessary (yet temporary) increase in challenge and chaos that innovation necessitates
- Innovate today: unless a C-Suite leader pierces through corporate inertia, nothing will happen, so do whatever it takes to get moving by clearing away obstacles for the time, getting sign-off from the Board if needed, and ensuring there is a working budget for this year, not one that may or may not be in the plan for sometime soon…and, as we know from Asterix, that tomorrow never comes
- Strategic investment: billion-dollar business model innovations (or product/service/process) do not just drop from the magic money trees and instead need to be identified, named, and claimed by a (relatively small) group of committed innovators who are paid, not to do Business As Usual work and instead focus on interrogating the future and seizing outsized opportunities before others do–while realizing that innovation investments can be de-risked by innovative processes and amortized by enabling multiple innovation teams to share the costs of the one set of tools, facilitation, and best-practices
- Assumption challenges: use the safety of an innovation program to surface the scared cows and challenge industry assumptions that feel safe and familiar before competitors do (which they will eventually)—but do this critical activity away from the rest of the business (that needs to focus on delivering the existing business efficiently and predictably) and remember that some of those assumptions underlying existing models will still be true and do not need disrupting (for now, at least)
- Realistic expectations: from the get-go, treat innovation as unlike anything else the business does because to deliver outsized ROI, innovation teams must be given the time, space, and permission needed to explore and experiment rather than extract and exploit—which has a logic that resists control freakery and spreadsheet geekery, unfolds with its own unique cadence and requires enormous amounts of hard work to make sense of incredible complexity, understand the capacity of emerging 4th Industrial Revolution technologies, explore the emerging, latent, hidden, and unstated needs of new kinds of consumer/customers, and make all this unique insight and information coherently rigorously removing possibilities to find one or more winning ideas
- Constant cognitive upgrading: at each stage in an innovation program (we have 8 in ours), there will be the necessity for executive and team members to overcome their various cognitive biases, think new thoughts, and upgrade their mindsets about emerging customer types, needs, digital technologies, ecosystems, existential risks, sustainability/purpose, and, above all, what business the firm is and should be in (for it is industry assumptions that block a GM from innovating a Tesla or Uber—breakthrough innovators start with emerging customer needs not industry conventions from a century or two ago)
- Customer insight hunting: seek the insights that necessarily fuel breakthrough innovations in existing market intelligence (focus group reports, big data, trend reports, etc.) but most of all in timely engagement in customer and frontline employee feedback because they point to unmet needs and mounting frustrations that may be the sources of exponential value in the future—and be ready to instigate the kind of customer/consumer research that does not confirm existing biases and assumptions but seeks to spot and understand the types of emerging needs, attitudes, and behaviors that unlock billion-dollar business ideas (I recommend ethnographic research, lead user research, and positive deviance research, all of which my team and I pioneered in the early 2000s)
- Groupthink avoidance with co-creation and diversity: bring together cross-functional teams made of diverse individuals from across the organization, including those at the top and bottom of the hierarchy, who share an interest in what the future holds and the ambition to seize opportunities that deliver outsized value—and reward and recognize all forms of contribution that unlock a greater share of the future—this includes bringing into some of the innovation activities emerging customer types, trusted vendors/suppliers/agencies, thought leaders (like journalists), and even old competitors (if they can place nicely and collaborate on massive industry-level innovations if they are required)
- Always divergence then convergence: at every stage of the process, from problem definition to concept improvement, it is vital that creativity and divergent thinking happen before the more familiar convergent and critical thinking occur; otherwise, you will get incremental improvements that solve the wrong problems—plus make sure that creativity is safeguarded but that all realize that innovation requires as much rigor, sweat, and effort as it does brainstorm-y fun-laughs-good times
- Include, but transcend, R&D: involve the molecules and code people at the right time and in the suitable spaces—simplifying and distilling emerging technologies, whether blockchain or CRISPR, into ways they could generate value for customers so everyone in the team can engage with the possibilities—but never let atoms and bytes lead what is conceived and imagined because successful innovation always requires a primary untapped (and often unseen) human need first and foremost—before the tech can win the day and there are usually ways to meet that need with existing technologies and capacities while the R&D boffins work on meeting it with more efficient/effective/scaleable solutions
- Dual-mode innovation activities: institute two distinct but mutually coherent sets of timelines, practices, cultures, management styles, structures, locations, and stages within one business so that everyday improvement and efficiency upgrades happen within a process designed for the delivery of marginal gains and innovation projects and innovation functions have a process that affords the best outcomes for outsized value-creation—and solve for how projects shift from one mode to the other without loss of fidelity, ownership, enthusiasm, and opportunity, ensuring different functions are orchestrated to execute together and an elegant segue-waying of the project from the innovation team to core operational teams
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- Rapid prototyping and Triple Loop learning: favor rapid prototyping over slow piloting, instituting quick, cheap, and low-risk ways to explore insights and ideas, sharing learning quickly and with the relevant teams, and engage in what I call (after Chris Argyris) Triple Loop learning—upgrading thinking with each test by seeking lessons for how to improve the specific innovation, the existing business model, and the sector/industry as a whole with each cycle of testing
- Constrain creativity and seek coherence: ensure that divergent/creative thinking happens in specific moments and within distinct stages so it builds gradual coherence—providing team members at the edges focus their insights and ideas on strategic opportunities set by those at the center (who are paid to have big strategic and systemic thoughts)
- Smart and rigorous experimentation: leverage the scientific method to design experimentation protocols that rigorously test specific hypotheses within innovation “atoms” that help build big ideas (innovation “molecules”) by systemically revealing what the customer of the future will want, value and enjoy and the operational and technological breakthroughs needed to deliver it
- Propel innovation with purpose and vision: ensure that all innovation activities are guided by a deep and compelling purpose of service to current and future customers (users/patients/employees, etc.) and a vision of how the world could be radically improved for them by the company’s innovations—but ensure that both purpose and vision can be upgraded and evolved as innovation learnings and lessons surface about where the future of the industry is heading (and we ensure that Sustainable Development Goals and other “externalities” are baked into innovation activities from the very start)
- Develop innovation capabilities: proactively invest in the building of crucial innovation capabilities within team members, particularly these critical creative leadership and innovation capabilities: innovation intuition (sensing emerging needs, intuiting the validity of ideas), sense-making in complexity, foresight, and futuring, customer insight finding and flexing, metacognition/learning/critical thinking, smart experimentation, and creative thinking (including invention/imagination)
- Human-centered innovation process: leverage the learnings of others to glean innovation process best practices while customizing and contextualizing the process to fit your specific ambitions, structures, industry, geography, and people—ensuring the process is alive and can evolve with each round of failing/learning/growing
- Innovation-ready performance management & reporting: design reporting and performance management protocols that fit innovation realities rather than Business-As-Usual activities—rewarding and recognizing fail-forward learning, rapid prototyping, creative thinking, resilience, commitment, inclusion, boldness, appropriate challenge over a sustained period (12-24 months) rather than usual success metrics and quarterly reporting
- Lightly-engineered, outcome-oriented process: a brilliant process is vital for breakthrough outcomes, but it should never crush the human beings in the process with heavy-handed rules and proscriptions; instead, it should be lightly held, geared to support and empower rather than diminish and block, and every process step should have a clear outcome that it is designed to deliver9In ours, the output of each stage, and step within the stage, is minutely designed to be in the ideal input for the next step/stage
- Appropriate incentives & rewards: innovators, innovation teams, and collaborators should be recognized and rewarded for curiosity, courage, and effort, not just billion-dollar outcomes; learning (through smart experimentation ‘fails) should be celebrated; and, ideally, execs will seek to share some of the exponential returns of breakthrough innovation with those who have taken the reputational and status risks
- Embrace conflict and tension: allow, in the appropriate moments (i.e., not at the start of a creative session), tensions and conflicts to be worked through as this usually ends up in a higher-order solution or “middle path,” with either/or thinking replaced by both/and thinking, and different team members advocating for different ideal states depending on whether they are geared more towards consumer/customer benefits or business benefits or environmental/social concerns
- Focus on effectiveness, not efficiency: innovators should focus on the effective use of resources to drive breakthrough outcomes, not on efficiencies, which usually trim out the very space and time needed for reflection, foresight, and listening to customers (empathically, which is inefficient but highly effective), and cultivating co-creation (also inefficient but effective)—and let the mainstream business drive efficiencies into any new products, services, processes, or business models as is their focus
- Invent it here: invest in top-line growth through self-authored and original value creation (who better than the company as industry experts to shape the future of the industry)—using in-house innovation capabilities in which $1M can routinely unlock a $1B concept—rather than relying for growth on efficiencies (that eventually start to diminish productivity not increase it), accounting tricks, and spending on (plus often writing off) expensive M&As, that usually cost a lot more in cultural integration than the accountants predict in their
- Idea agnosticism: innovation should always follow customer needs and seek to leverage insights into the future of a sector to unlock growth without pre-existing notions of what is in or out of scope; all ideas should be up for debate no matter where or who they originate and none should be removed before a deep discussion on fruitfulness and feasibility (operational, financial, commercial, legal, and brand fit); all ideas should be allowed to grow and fruit over a good few months before decisions are made (and all insights and ideas should be kept in an “innovation bank” for future employees to refer to or relook at); and much care must be taken that ideas are not allowed to shrink back into a comfort zone that fits the existing assumption base during the months (and years) they are developed and implemented
- ‘Process’ innovation fears and trauma memories: the organization and its senior leaders should proactively “process” and remove the sting from past innovation failures they, the organization, and the industry have endured so they do not crush the spirit and passion of innovation teams in the present
- Build psychological safety and trust: safety and trust are the lubricants of all significant change, innovation, and transformation because having creative ideas and giving up established habits to change take a huge amount of personal courage. People often feel very vulnerable in these moments, particularly in high-performance/efficiency cultures, and can be transported back to humiliating times from their youth. Innovation can be stopped dead by traditional management styles, so cultivating creativity and collaboration through trust and safety needs to be budgeted into an innovation program; innovation leaders should prioritize trust building and emotional safety in the innovation team and with third parties who are invited into workshops; professional facilitators should be harnessed to ensure that each workshop is a safe yet brave space for what I call “rigorous creativity” (safety and trust should also be a priority when sharing ideas and feedback outside of workshops, so expedient and ill-considered emails and communications do not ruin all the good work)
- Leverage consultancies for the right reasons: an excellent innovation consultancy should never want to black box their process, limit the amount of value that can be extracted from an investment, nor imply that the client teams cannot be as creative as them (all of these are rife in the industry as they create consultancy over-reliance)—instead, consultancies should be used to hold space for innovation and new thinking, build trust and connection, help find and use insights, empower teams to feel and be creative, provide best-practice tools and process—and, above all, help the innovation and organization open up, and keep open, “possibility spaces” to innovate into (which means reducing biases and assumptions for long enough to create, invent, and imagine)
- Goldilocks zone between open and closed innovation: innovation processes and programs should occupy a flexible and dynamic space where some activities and thinking happen in tiny, confidential teams and some parts of the process happen in highly collaborative ways with maximal openness, transparency, and co-creation–it is the innovation leaders job, with advice from consultancies/coaches, who is invited into what discussions, why, and when
- Consistent and coherent ambitions: as much as possible, innovation ambitions should be set and agreed upon by the Board, with a 3-10-year timeline baked in, to reduce the tendency for new executives to tear things up or give way to “not invented here” syndrome; for if innovation is agnostically about creating exponential value for customers (and reaping the rewards), it should be above and beyond politics, fiefdom management, and tribalism, with the customer and their future always held as the highest good—I suggest clients choose customer/consumer problems that matter so they can fall in love with the problem as long as it takes to solve it entirely (well, as close as one can get)
- Constant influencing and storytelling: innovators must never forget that those they pitch and present to, or seek support from, have not had the breakthroughs or insights yet (and even if they were in some of the workshops, will have forgotten or not integrated the fresh thinking), so big ideas and bold breakthroughs are only as powerful as the stories told about them and the stakeholders influenced to become allies for delivering them
If you want to explore how my team and I could support you in developing a crack innovation team, building a cohort of innovation leaders, or delivering breakthrough innovations that forge the future of your industry–we genuinely believe innovation is where strategy/execution and leadership development/learning are best done together, rather than artificially split into different budgets and locations—do get in touch. You may also find this podcast I did with Jens Heitland on leading and landing transformational innovation in Fortune 500s interesting!